Internal Revenue Bulletin 1996-2 (PDF rendition): IRS Notices

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

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Bulletin No. 1996–2
January 8, 1996
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
INCOME TAX
Rev. Rul. 96–2, page 5.
Insurance companies; interest rate tables. Prevailing
state assumed interest rates are provided for the
determination of reserves under section 807 of the
Code for contracts issued in 1995 and 1996. Rev. Rul.
92–19 supplemented in part.
Rev. Rul. 96–6, page 8.
Federal rates; adjusted federal rates; adjusted federal
long-term rate, and the long-term exempt rate. For
purposes of sections 1274, 1288, 382, and other
sections of the Code, tables set forth the rates for
January 1996.
EMPLOYEE PLANS
Notice 96–2, page 15.
Guidelines are set forth for determining for December
1995, the weighted average interest rate and the
resulting permissible range of interest rates used to
calculate current liability for purposes of the full funding
limitation of section 412(c)(7) of the Code as amended
by the Omnibus Budget Reconciliation Act of 1987 and
by the Uruguay Round Agreements Act (GATT).
EXEMPT ORGANIZATIONS
Announcement 96–3, page 57.
A list is given of organizations now classified as private
foundations.
Rev. Proc. 96–10, page 17.
Information returns, organizations not required to file.
This procedure lists a class of organizations, affiliated
with a church or convention or association of churches,
and exempt from federal income tax under section
501(c)(3) of the Internal Revenue Code, that is not
required to file an annual information return Form 990,
Return of Organizations Exempt from Income Tax.
ESTATE TAX
Rev. Rul. 96–3, page 14.
Valuation of annuities. Interest for life or a term of
years, and remainder and reversionary interests when
the individual, who is the measuring life, is terminally
ill. Rev. Ruls. 80–80 and 66–307 are obsolete
effective December 14, 1995.
EXCISE TAXES
Announcement 96–2, page 57.
A petition has been filed to add butyl benzyl phthalate
to the list of taxable substances in section 4672(a)(3)
of the Code.
ADMINISTRATIVE
Rev. Proc. 96–9, page 15.
Early referral of unagreed issues from examination to
appeals. This procedure describes the method by which
a taxpayer requests early referral of one or more
unagreed issues from Examination to Appeals.
Rev. Proc. 96–11, page 18.
Electronic filing; magnetic media; 1995 Form 1042S
specifications. Specifications are set forth for the
magnetic or electronic filing of 1995 From 1042–S. The
form may be filed with the Service using
1
⁄2 inch
magnetic tape; IBM 3480/3490 or AS400 compatible
tape cartridges; or 5
1
⁄4-, 3
1
⁄2-inch diskettes. Rev. Proc.
93–16 superseded.
(Continued on page 4)
Finding Lists begin on page 60.

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Mission of the Service
The purpose of the Internal Revenue Service is to
collect the proper amount of tax revenue at the least
cost; serve the public by continually improving the
quality of our products and services; and perform in a
manner warranting the highest degree of public
confidence in our integrity, efficiency and fairness.
Statement of Principles
of Internal Revenue
Tax Administration
The function of the Internal Revenue Service is to
administer the Internal Revenue Code. Tax policy
for raising revenue is determined by Congress.
With this in mind, it is the duty of the Service to
carry out that policy by correctly applying the laws
enacted by Congress; to determine the reasonable
meaning of various Code provisions in light of the
Congressional purpose in enacting them; and to
perform this work in a fair and impartial manner,
with neither a government nor a taxpayer point of
view.
At the heart of administration is interpretation of the
Code. It is the responsibility of each person in the
Service, charged with the duty of interpreting the
law, to try to find the true meaning of the statutory
provision and not to adopt a strained construction in
the belief that he or she is ‘‘protecting the revenue.’’
The revenue is properly protected only when we as-
certain and apply the true meaning of the statute.
The Service also has the responsibility of applying
and administering the law in a reasonable,
practical manner. Issues should only be raised by
examining officers when they have merit, never
arbitrarily or for trading purposes. At the same
time, the examining officer should never hesitate
to raise a meritorious issue. It is also important
that care be exercised not to raise an issue or to
ask a court to adopt a position inconsistent with
an established Service position.
Administration should be both reasonable and
vigorous. It should be conducted with as little
delay as possible and with great courtesy and
considerateness. It should never try to overreach,
and should be reasonable within the bounds of law
and sound administration. It should, however, be
vigorous in requiring compliance with law and it
should be relentless in its attack on unreal tax
devices and fraud.

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Introduction
The Internal Revenue Bulletin is the authoritative
instrument of the Commissioner of Internal Revenue for
announcing official rulings and procedures of the
Internal Revenue Service and for publishing Treasury
Decisions, Executive Orders, Tax Conventions, legisla-
tion, court decisions, and other items of general
interest. It is published weekly and may be obtained
from the Superintendent of Documents on a subscrip-
tion basis. Bulletin contents of a permanent nature are
consolidated semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin
all substantive rulings necessary to promote a uniform
application of the tax laws, including all rulings that
supersede, revoke, modify, or amend any of those
previously published in the Bulletin. All published
rulings apply retroactively unless otherwise indicated.
Procedures relating solely to matters of internal
management are not published; however, statements of
internal practices and procedures that affect the rights
and duties of taxpayers are published.
Revenue rulings represent the conclusions of the
Service on the application of the law to the pivotal facts
stated in the revenue ruling. In those based on
positions taken in rulings to taxpayers or technical
advice to Service field offices, identifying details and
information of a confidential nature are deleted to
prevent unwarranted invasions of privacy and to comply
with statutory requirements.
Rulings and procedures reported in the Bulletin do not
have the force and effect of Treasury Department
Regulations, but they may be used as precedents.
Unpublished rulings will not be relied on, used, or cited
as precedents by Service personnel in the disposition of
other cases. In applying published rulings and proce-
dures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be
considered, and Service personnel and others con-
cerned are cautioned against reaching the same
conclusions in other cases unless the facts and
circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on
provisions of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows:
Subpart A, Tax Conventions, and Subpart B, Legislation
and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellanous.
To the extent practicable, pertinent cross references to
these subjects are contained in the other Parts and
Subparts. Also included in this part are Bank Secrecy
Act Administrative Rulings. Bank Secrecy Act Admin-
istrative Rulings are issued by the Department of the
Treasury’s Office of the Assistant Secretary
(Enforcement).
Part IV.—Items of General Interest.
With the exception of the Notice of Proposed Rulemak-
ing and the disbarment and suspension list included in
this part, none of these announcements are consoli-
dated in the Cumulative Bulletins.
The first Bulletin for each month includes an index for
the matters published during the preceding month.
These monthly indexes are cumulated on a quarterly
and semiannual basis, and are published in the first
Bulletin of the succeeding quarterly and semi-annual
period, respectively.
The Bulletin Index-Digest System, a research and
reference service supplementing the Bulletin, may be
obtained from the Superintendent of Documents on a
subscription basis. It consists of four Services: Service
No. 1, Income Tax; Service No. 2, Estate and Gift
Taxes; Service No. 3, Employment Taxes; Service No.
4, Excise Taxes. Each Service consists of a basic
volume and a cumulative supplement that provides (1)
finding lists of items published in the Bulletin, (2)
digests of revenue rulings, revenue procedures, and
other published items, and (3) indexes of Public Laws,
Treasury Decisions, and Tax Conventions.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents U.S. Government Printing Office, Washington, D.C. 20402.

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HIGHLIGHTS
OF THIS ISSUE—Continued
ADMINISTRATIVE—Continued
T.D. 8640, page 10.
Final regulations under section 6033 of the Code that
exempt certain integrated auxiliaries of churches from
filing information returns.
Announcement 96–1, page 57.
Executors and return preparers should continue to use
the August 1993 revision of Form 706, United States
Estate (and Generation-Skipping Transfer) Tax Return,
after December 31, 1995. The Service anticipates that
a revised Form 706 will be available in early 1996.

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Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
Section 42.—Low-Income Housing
Credit
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 8.
Section 170.—Charitable, etc.,
contributions and gifts
26 CFR 1.170A–1: Charitable, etc.,
contributions and gifts; allowance of
deduction.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which hold that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, page 14.
26 CFR 1.170A–6: Charitable contributions in
trust.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which holds that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, page 14.
Section 280G.—Golden Parachute
Payments
Federal short-term, mid-term, and long-term
rates are set forth for the month of January 1996.
See Rev. Rul. 96–6, page 8.
Section 382.—Limitation on Net
Operating Loss Carryforwards and
Certain Built-In Losses Following
Ownership Change
The adjusted federal long-term rate is set forth
for the month of January 1996. See Rev. Rul.
96–6, page 8.
Section 412.—Minimum Funding
Standards
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 8.
Section 467.—Certain Payments for
the Use of Property or Services
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 8.
Section 468.—Special Rules for
Mining and Solid Waste Reclamation
and Closing Costs
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 8.
Section 483.—Interest on Certain
Deferred Payments
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 8.
Section 642.—Special rules for
credits and deductions
26 CFR 1.642(c)–6: Valuation of a remainder
interest in property transferred to a pooled
income fund after April 30, 1989.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which hold that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, page 14.
Section 664.—Charitable remainder
trusts
26 CFR 1.664–1: Charitable remainder trusts.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which hold that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, page 14.
Section 807.—Rules for Certain
Reserves
Insurance companies; interest rate
tables. Prevailing state assumed inter-
est rates are provided for the deter-
mination of reserves under section 807
of the Code for contracts issued in
1995 and 1996. Rev. Rul. 92–19
supplemented in part.
Rev. Rul. 96–2
For purposes of §807(d)(4) of the
Internal Revenue Code, for taxable
years beginning after December 31,
1994, this ruling supplements the
schedules of prevailing state assumed
interest rates set forth in Rev. Rul. 92–
19, 1992–1 C.B. 227. This information
is to be used by insurance companies in
computing their reserves for (1) life
insurance and supplementary total and
permanent disability benefits, (2) indi-
vidual annuities and pure endowments,
and (3) group annuities and pure
endowments. As §807(d)(2)(B) re-
quires that the interest rate used to
compute these reserves be the greater
of (1) the applicable federal interest
rate, or (2) the prevailing state assumed
interest rate, the table of applicable
federal interest rates in Rev. Rul. 92–
19 is also supplemented.
Following are supplements to sched-
ules A, B, C, and D to Part III of Rev.
Rul. 92–19, providing prevailing state
assumed interest rates for insurance
products with different features issued
in 1995 and 1996, and a supplement to
the table in Part IV of Rev. Rul. 92–19,
providing the applicable federal interest
rate under §807(d) for 1995 and 1996.
This ruling does not supplement Parts I
and II of Rev. Rul. 92–19.
This is the fourth supplement to the
interest rates provided in Rev. Rul. 92–
19. Earlier supplements were published
in Rev. Rul. 93–58, 1993–2 C.B. 241
(interest rates for insurance products
issued in 1992 and 1993), Rev. Rul.
94–11, 1994–1 C.B. 196 (1993 and
1994), and Rev. Rul. 95–4, 1995–1
C.B. 141 (1994 and 1995).

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Part III. Prevailing State Assumed Interest Rates—Products Issued in Years After 1982.*
Schedule A
STATUTORY VALUATION INTEREST RATES
BASED ON THE 1980 AMENDMENTS TO THE
NAIC STANDARD VALUATION LAW
A.Life insurance valuation:
Guarantee Duration
(years)
Calendar Year of
Issue 1996
10 or fewer5.50**
More than 10 but not more than 205.25**
More than 204.50**
Source: Rates calculated from the monthly averages, ending June 30, 1995, of Moody’s
Corporate Bond Yield Average—Monthly Average Corporates.
* *As the applicable federal interest rate for 1996 of 6.63 percent exceeds this prevailing state
assumed interest rate, the interest rate to be used for this product under §807 is 6.63 percent.
* The terms used in the schedules in this ruling and in Part III of Rev. Rul. 92–19 are those
used in the Standard Valuation Law; the terms are defined in Rev. Rul. 92–19.
Part III, Schedule B
STATUTORY VALUATION INTEREST RATES
BASED ON THE 1980 AMENDMENTS TO THE
NAIC STANDARD VALUATION LAW
B.Single premium immediate annuities and annuity benefits involving life contingencies arising
from other annuities with cash settlement options and from guaranteed interest contracts with
cash settlement options:
Calendar Year of
Issue
Valuation Interest
Rate
19957.25*
Source: Rates calculated from the monthly averages, ending June 30, 1995, of Moody’s
Corporate Bond Yield Average—Monthly Average Corporates. The terms used in this schedule
are those used in the Standard Valuation Law as defined in Rev. Rul. 92–19.
*As this prevailing state assumed interest rate exceeds the applicable federal interest rate for
1995 of 6.99 percent, the interest rate to be used for this product under §807 is 7.25 percent.

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Part III, Schedule C13—1995
STATUTORY VALUATION INTEREST RATES
BASED ON NAIC STANDARD VALUATION LAW
FOR 1995 CALENDAR YEAR BUSINESS
GOVERNED BY THE 1980 AMENDMENTS
C.Valuation interest rates for other annuities and guaranteed interest contracts that are valued on an issue year basis:
Cash
Settlement
Options?
Future
Interest
Guarantee?Guarantee Duration (years)
Valuation Interest Rate For
Plan Type
ABC
YesYes5 or fewer7.256.25*5.75*
More than 5, but not more than 107.006.25*5.75*
More than 10, but not more than 206.25*5.50*5.25*
More than 205.25*4.75*4.75*
YesNo5 or fewer7.506.50*6.00*
More than 5, but not more than 107.256.50*6.00*
More than 10, but not more than 206.50*5.75*5.50*
More than 205.50*5.00*5.00*
NoYes or No5 or fewer7.25
More than 5, but not more than 107.00NOT APPLICABLE
More than 10, but not more than 206.50*
More than 205.50*
Source:Rates calculated from the monthly averages, ending June 30, 1995 of Moody’s Corporate Bond Yield Average—
Monthly Average Corporates.
*As the applicable federal interest rate for 1995 of 6.99 percent exceeds this prevailing state assumed interest rate, the
interest rate to be used for this product under §807 is 6.99 percent.
Part III, Schedule D13—1995
STATUTORY VALUATION INTEREST RATES
BASED ON NAIC STANDARD VALUATION LAW
FOR 1995 CALENDAR YEAR BUSINESS
GOVERNED BY THE 1980 AMENDMENTS
D.Valuation interest rates for other annuities and guaranteed interest contracts that are contracts with cash settlement
options and that are valued on a change in fund basis:
Cash
Settlement
Options?
Future
Interest
Guarantee?Guarantee Duration (years)
Valuation Interest Rate
For Plan Type
ABC
YesYes5 or fewer8.257.506.00*
More than 5, but not more than 108.007.506.00*
More than 10, but not more than 207.257.005.75*
More than 206.25*6.25*5.25*
YesNo5 or fewer8.508.006.25*
More than 5, but not more than 108.258.006.25*
More than 10, but not more than 207.507.256.00*
More than 206.50*6.50*5.50*
Source: Rates calculated from the monthly averages, ending June 30, 1995, of Moody’s Corporate Bond Yield Average—
Monthly Average Corporates.
*As the applicable federal interest rate for 1995 of 6.99 percent exceeds this prevailing state assumed interest rate, the
interest rate to be used for this product under §807 is 6.99 percent.

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Part IV. Applicable Federal Interest Rates.
TABLE OF
APPLICABLE FEDERAL INTEREST RATES
FOR PURPOSES OF §807
YearInterest Rate
19956.99
19966.63
Sources: Rev. Rul. 94–73, 1994–2 C.B. 197 for the 1995 rate and Rev. Rul. 95–79, 1995–49
I.R.B. 4 (at 6) for the 1996 rate.
EFFECT ON OTHER REVENUE
RULINGS
Rev. Rul. 92–19 is supplemented by
the addition to Part III of that ruling of
prevailing state assumed interest rates
under §807 for certain insurance prod-
ucts issued in 1995 and 1996 and is
further supplemented by an addition to
the table in Part IV of Rev. Rul. 92–19
listing applicable federal interest rates.
Parts I and II of Rev. Rul. 92–19 are
not affected by this ruling.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Ann H. Logan of the Office of
Assistant Chief Counsel (Financial In-
stitutions and Products). For further
information regarding this revenue rul-
ing contact her on (202) 622-3970 (not
a toll-free call).
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 00.
Section 846.—Discounted Unpaid
Losses Defined
The adjusted applicable federal short-term,
mid-term, and long-term rates are set for the
month of January 1996. See Rev. Rul. 96–6,
page 00.
Section 1274.—Determination of
Issue Price in the Case of Certain
Debt Instruments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468,
483, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal
rates; adjusted federal long-term rate,
and the long-term exempt rate. For
purposes of sections 1274, 1288, 382,
and other sections of the Code, tables
set forth the rates for January 1996.
Rev. Rul. 96–6
This revenue ruling provides various
prescribed rates for federal income tax
purposes for January 1996 (the current
month). Table 1 contains the short-
term, mid-term, and long-term applica-
ble federal rates (AFR) for the current
month for purposes of section 1274(d)
of the Internal Revenue Code. Table 2
contains the short-term, mid-term, and
long-term adjusted applicable federal
rates (adjusted AFR) for the current
month for purposes of section 1288(b).
Table 3 sets forth the adjusted federal
long-term rate and the long-term tax-
exempt rate described in section 382(f).
Table 4 contains the appropriate per-
centages for determining the low-
income housing credit described in
section 42(b)(2) for buildings placed in
service during the current month. Fi-
nally, Table 5 contains the federal rate
for determining the present value of an
annuity, an interest for life or for a
term of years, or a remainder or a
reversionary interest for purposes of
section 7520.
Rev. Rul. 95–79, 1995–49 I.R.B. 4,
which set forth the applicable federal
rates and various other rates for De-
cember 1995, incorrectly provided in
Table 1 that the Long-Term 120%
Applicable Federal Rate based on
annual compounding was 7.01%. The
correct percentage is 7.65%. This cor-
rection will be made to Rev. Rul. 95–
79 when it is published in issue 1995–2
of the Cumulative Bulletin.

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REV. RUL. 96–6 TABLE 1
Applicable Federal Rates (AFR) for January 1996
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-Term
AFR5.50%5.43%5.39%5.37%
110% AFR6.06%5.97%5.93%5.90%
120% AFR6.63%6.52%6.47%6.43%
Mid-Term
AFR5.73%5.65%5.61%5.58%
110% AFR6.32%6.22%6.17%6.14%
120% AFR6.89%6.78%6.72%6.69%
150% AFR8.66%8.48%8.39%8.33%
175% AFR10.13%9.89%9.77%9.69%
Long-Term
AFR6.19%6.10%6.05%6.02%
110% AFR6.82%6.71%6.65%6.62%
120% AFR7.45%7.32%7.25%7.21%
REV. RUL. 96–6 TABLE 2
Adjusted AFR for January 1996
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
adjusted AFR3.68%3.65%3.63%3.62%
Mid-term
adjusted AFR4.37%4.32%4.30%4.28%
Long-term
adjusted AFR5.31%5.24%5.21%5.18%
REV. RUL. 95–79 TABLE 3
Rates Under Section 382 for January 1996
Adjusted federal long-term rate for the current month5.31%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the
adjusted federal long-term rates for the current month and the prior two months).5.65%
REV. RUL. 95–79 TABLE 4
Appropriate Percentages Under Section 42(b)(2)
for January 1996
Appropriate percentage for the 70% present value low-income housing credit8.40%
Appropriate percentage for the 30% present value low-income housing credit3.60%

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REV. RUL. 96–6 TABLE 5
Rate Under Section 7520 for January 1996
Applicable federal rate for determining the present value of an annuity, an interest for life or
a term of years, or a remainder or reversionary interest6.8%
Section 1288.—Treatment of Original
Issue Discount on Tax-Exempt
Obligations
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 8.
Section 2031.—Definition of gross
estate
26 CFR 20.2031–7: Valuation of annuities,
interests for life or term of years, and
remainder or reversionary interests for estate
of decedents for which the valuation date of
the gross estate is after April 30, 1989.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which hold that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, page 14.
Section 2512.—Valuation of gifts
26 CFR 25.2512–5: Valuation of annuities,
unitrust interests, interests for life or term of
years, and remainder or reversionary interests
transferred after April 30, 1989.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which hold that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, page 14.
Section 6033.—Returns by Exempt
Organizations
26 CFR 1.6033–2: Returns by exempt
organizations (taxable years beginning after
December 31, 1969) and returns by certain
nonexempt organizations (taxable years
beginning after December 31, 1980).
Organizations, affiliated with a church or
convention or association of churches, and
exempt from federal income tax under section
501(c)(3) of the Internal Revenue Code, that are
not required to file an annual information Form
990, Return of Organizations Exempt from
Income Tax. See Rev. Proc. 96–10, page 17.
26 CFR 1.6033–2: Returns by exempt
organizations (taxable years beginning after
December 31, 1969) and returns by certain
nonexempt organizations (taxable years
beginning after December 31, 1980).
T.D. 8640
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Exempt Organizations Not Required
To File Annual Returns: Integrated
Auxiliaries Of Churches
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations that exempt certain
integrated auxiliaries of churches from
filing information returns. These reg-
ulations incorporate the rules of Rev.
Proc. 86–23 (1986–1 C.B. 564), into
the regulations defining integrated aux-
iliary for purposes of determining what
entities must file information returns.
The new definition focuses on the
sources of an organization’s financial
support in addition to the nature of the
organization’s activities.
DATES: These regulations are effective
December 20, 1995.
For dates of applicability of these
regulations, see §1.6033–2(h)(6).
FOR FURTHER INFORMATION
CONTACT: Terri Harris or Paul Accet-
tura, of the Office of the Associate
Chief Counsel (Employee Benefits and
E x e m p t O r g a n i z a t i o n s ) , I R S , a t
202-622-6070 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
On December 15, 1994 proposed
regulations §§1.6033–2 and 1.508–1
[EE–41–86 (1995–1 C.B. 841)] under
sections 6033(a)(2) and 508 of the
Internal Revenue Code of 1986, respec-
tively, were published in the Federal
Register (59 FR 64633). The proposed
regulations adopted the rules of Rev.
Proc. 86–23 (1986–1 C.B. 564) as the
definition of integrated auxiliary of a
church replacing the current definition
set forth in §1.6033–2(g)(5). Addi-
tionally, section 508(c) excepts inte-
grated auxiliaries of a church from the
requirement that new organizations no-
tify the Secretary of the Treasury that
they are applying for recognition of
section 501(c)(3) status (Form 1023).
For consistency, §1.508–1(a)(3)(i)(a),
which gives several examples of inte-
grated auxiliaries, was proposed to be
amended by deleting the examples and
by adding a cross-reference to
§1.6033–2(h) for the definition of
integrated auxiliary of a church. After
IRS and Treasury consideration of the
public comments received regarding the
proposed regulations, the regulations
are adopted as revised by this Treasury
decision.
Explanation of Provisions
Section 6033(a)(1) requires organiza-
tions that are exempt from income tax
under section 501(a) to file annual
returns. Section 6033(a)(2)(A) provides
exceptions to this requirement for
certain specified types of organizations,
including, among others, churches,
their integrated auxiliaries, and conven-
tions or associations of churches. Sec-
tion 6033(a)(2)(B) provides that the
Secretary may relieve any organization
from the filing requirement where the
Secretary determines that filing is not
necessary to the efficient administration
of the internal revenue laws.

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Prior to this Treasury decision,
§1.6033–2(g)(5)(i) defined the term
integrated auxiliary of a church as an
organization that is: (1) exempt from
taxation as an organization described in
section 501(c)(3); (2) affiliated with a
church (within the meaning of
§1.6033–2(g)(5)(iii)); and (3) engaged
in a principal activity that is ‘‘ex-
clusively religious.’’ Section 1.6033–
2(g)(5)(ii) provides that an organi-
zation’s principal activity is not
‘‘exclusively religious’’ if that activity
is educational, literary, charitable, or of
another nature (other than religious)
that would serve as a basis for
exemption under section 501(c)(3).
The ‘‘exclusively religious’’ element
of the definition was litigated in
Lutheran Social Service of Minnesota
v. United States, 583 F. Supp. 1298 (D.
Minn. 1984), rev’d 758 F.2d 1283 (8th
Cir. 1985), and Tennessee Baptist
Children’s Homes, Inc. v. United
States, 604 F. Supp. 210 (M.D. Tenn.
1984) aff’d, 790 F.2d 534 (6th Cir.
1986). While the litigation over the
‘‘exclusively religious’’ standard was
proceeding, Congress enacted section
3121(w) of the Internal Revenue Code,
Tax Reform Act of 1984, Pub. L. 98–
369, section 2603(b), 98 Stat. 494,
1128 (1984), which permits certain
church-related organizations to elect
out of social security coverage if they
meet a standard based on the degree of
financial support they receive from a
church. In light of this litigation and
the enactment of section 3121(w), IRS
personnel met with representatives of
various church organizations to en-
courage voluntary compliance with the
filing requirements and to develop a
less controversial and more objective
standard for identifying an integrated
auxiliary of a church.
Subsequent to these meetings the
IRS published Rev. Proc. 86–23, which
provides that, for tax years beginning
after December 31, 1975, an organiza-
tion is not required to file Form 990 if
it is: (1) described in sections 501(c)(3)
and 509(a)(1), (2), or (3); (2) affiliated
with a church or a convention or as-
sociation of churches; and (3) internally
supported. With respect to this last
criterion, Rev. Proc. 86–23 sets forth
an internal support standard that is
similar to the financial support standard
in section 3121(w).
The proposed regulations adopted the
rules of Rev. Proc. 86–23 as the
definition of the term integrated auxili-
ary of a church replacing the current
definition set forth in §1.6033–2(g)(5).
The final regulations retain the defini-
tion of an integrated auxiliary of a
church that is contained in the pro-
posed regulations.
Under this Treasury decision, to be
an integrated auxiliary of a church an
organization must first be described in
section 501(c)(3) and section 509(a)(1),
(2), or (3), and be affiliated with a
church in accordance with standards set
forth in the regulations. An organiza-
tion meeting those tests is an integrated
auxiliary if it either: (1) does not offer
admissions, goods, services, or facili-
ties for sale, other than on an incidental
basis, to the general public; or (2)
offers admissions, goods, services, or
facilities for sale, other than on an
incidental basis, to the general public
and not more than 50 percent of its
support comes from a combination of
government sources, public solicitation
of contributions, and receipts other than
those from an unrelated trade or
business.
Some commentators have noted that
certain church-related organizations
that finance, fund and manage pension
programs were originally excused from
filing by Notice 84–2 (1984–1 C.B.
331), which was issued pursuant to the
Commissioner’s discretionary authority
under section 6033(a)(2)(B). Rev. Proc.
86–23 states that Notice 84–2 is
superseded by Rev. Proc. 86–23 be-
cause the organizations excused from
filing under the notice are excused
from filing by the revenue procedure.
The commentators have expressed con-
cern that the proposed regulations did
not relieve church pension plans de-
scribed in Notice 84–2 from the filing
requirement. The organizations excused
from filing under Notice 84–2 do not
necessarily meet the definition of an
integrated auxiliary of a church under
these final regulations. Nevertheless,
the proposed regulations were not
intended to alter the exemption from
filing provided in Notice 84–2 and
reaffirmed in Rev. Proc. 86–23. To
make this intent clear, the IRS is
issuing Revenue Procedure 96–10 at
the same time that it issues these final
regulations. Rev. Proc. 96–10 carries
over the exemption from filing for
church pension plan organizations that
was set forth in Notice 84–2. Having
reaffirmed those parts of Rev. Proc.
86–23 that were not incorporated into
these final regulations, Rev. Proc. 96–
10 also obsoletes Rev. Proc. 86–23.
The IRS developed the internal sup-
port test contained in the proposed
regulations based on its conclusion that
Congress intended that organizations
receiving a majority of their support
from public and government sources, as
opposed to those receiving a majority
of their support from church sources,
should file annual information returns
in order that the public have a means
of inspecting the returns of these
organizations. The annual information
return also was intended to serve as a
means by which the IRS could ex-
amine, if necessary, those organizations
r e c e i v i n g s u b s t a n t i a l n o n - c h u r c h
support.
One commentator has suggested that
the definition of an integrated auxiliary
of a church should consist of a church-
related structural test rather than an
internal support test. The IRS and the
Treasury Department believe that the
use of a structural test could lead to
problems similar to those caused by the
‘‘exclusively religious’’ test. Addi-
tionally, the suggested definition would
frustrate Congress’ intended objective
of allowing ongoing public scrutiny of
organizations receiving the majority
their support from public and govern-
ment sources.
A commentator has also suggested
that by using the internal support test
as part of the new definition of an
integrated auxiliary of a church, the
IRS is attempting to ‘‘overrule’’ the
holdings in the previously mentioned
court cases (i.e. Tennessee Baptist
Children’s Home and Lutheran Social
Service of Minnesota). The IRS and the
Treasury Department believe that the
courts’ rulings questioned the validity
of the ‘‘exclusively religious’’ activity
requirement contained in the former
regulation on the basis that it is not
within the Service’s discretion to assess
the religious nature of a church’s
activities. Having eliminated the ‘‘ex-
clusively religious’’ activity test from
the definition of integrated auxiliary of
a church, the IRS and the Treasury
Department believe that the definition
in the final regulation is consistent with
the courts’ holdings as well as the
statute and the legislative history.
Some commentators have suggested
that the first sentence of §1.6033–
2(g)(5)(iv) of the regulations in effect
prior to this Treasury decision should
be included in the final regulations.
That sentence identified specific types
of organizations as integrated auxili-
aries of churches in accordance with
legislative history. Although §1.6033–
2(h) of the proposed regulations was

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intended to provide a general definition
that could apply in all instances, the
IRS and the Treasury Department agree
that, in order to be consistent with the
legislative history, parts of §1.6033–
2(g)(5)(iv) of the regulations should be
included in these final regulations.
Therefore, these final regulations in-
clude §1.6033–2(h)(5) that states that
‘‘a men’s or women’s organization, a
seminary, a mission society, or a youth
group’’ is an integrated auxiliary of a
church regardless of whether it meets
the internal support test in to §1.6033–
2(h)(1)(iii). (The tests under §1.6033–
2(h)(1)(i) and (ii) must still be met.)
Comments were received objecting
that Example 4 relating to seminaries
did not describe a realistic set of facts
and, therefore, could lead to confusion.
Accordingly, Example 4 has been
eliminated. Also, the treatment of semi-
naries has been clarified by §1.6033–
2(h)(5). We also note that, in addition
to the exception for seminaries,
§1.6033–2(g)(1)(vii) of the regulations
excepts certain schools below college
level that are affiliated with a church or
operated by a religious order from the
filing requirements of section 6033.
Except for a paragraph numbering
change contained in a cross-reference,
§1.6033–2(g)(1)(vii) is unchanged by
these final regulations.
Several commentators have sug-
gested that expanded definitions of
certain terms used in the internal
support test be included in this Treas-
ury decision. The final regulations do
not incorporate this suggestion. The
IRS and the Treasury Department
intend for these final regulations to
reissue the test published in Rev. Proc.
86–23 as the new definition for an
integrated auxiliary of a church. If
guidance is necessary on the applica-
tion of the definition to specific cases,
that guidance is more appropriately
provided in non-regulatory form, such
as through private letter rulings or
revenue rulings.
The amendment to §1.6033–2(g)(5)
is effective with respect to returns filed
for taxable years beginning after De-
cember 31, 1969. However, for returns
filed for taxable years beginning after
December 31, 1969, but before Decem-
ber 20, 1995, the exclusively religious
test contained in §1.6033–2(g)(5) prior
to its amendment by these final regula-
tions may, at the entity’s option, be
used as an alternative to the financial
support test in determining whether an
entity is an integrated auxiliary of a
church. The remainder of the amend-
ments are effective with respect to
returns for taxable years beginning
after December 31, 1969. Therefore,
for returns filed for taxable years
beginning after December 20, 1995, the
definition of integrated auxiliary of a
church contained in §1.6033–2(h) will
be used in determining whether an
entity is an integrated auxiliary of a
church.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in EO
12866. Therefore, a regulatory assess-
ment is not required. It has also been
determined that section 553(b) of the
Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flex-
ibility Act (5 U.S.C. chapter 6) do not
apply to these regulations, and, there-
fore, Regulatory Flexibility Analysis is
not required. Pursuant to section
7805(f) of the Internal Revenue Code,
the notice of proposed rulemaking
preceding these regulations was submit-
ted to the Chief Counsel for Advocacy
of the Small Business Administration
for comment on its impact on small
business.
Drafting Information
The principal author of this Treasury
decision is Terri Harris, Office of the
Associate Chief Counsel (Employee
Benefits and Exempt Organizations),
IRS. However, personnel from other
offices of the IRS and the Treasury
Department participated in their
development.
******
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph l. The authority for part 1
continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.508–1 is amended
by revising paragraphs (a)(3)(i) intro-
ductory text and (a)(3)(i)(a) to read as
follows:
§1.508–1 Notices.
(a) * * *
(3)* * * (i) Paragraphs (a)(1) and
(2) of this section are inapplicable to
the following organizations:
(a) Churches, interchurch organiza-
tions of local units of a church,
c o n v e n t i o n s o r a s s o c i a t i o n s o f
churches, or integrated auxiliaries of a
church. See §1.6033–2(h) regarding the
definition of integrated auxiliary of a
church;
******
Par. 3. Section 1.6033–2 is amended
as follows:
1.Paragraphs (g)(1)(i) and (g)(vii)
are revised.
2.Paragraph (g)(5) is removed and
reserved.
3.Paragraphs (h) through (j) are
redesignated as paragraphs (i) through
(k).
4.New paragraph (h) is added.
The added and revised provisions
read as follows:
§1.6033–2 Returns by exempt
organizations (taxable years
beginning after December 31, 1969)
and returns by certain nonexempt
organizations (taxable years
beginning after December 31, 1980).
******
(g)* * *
(1)* * *
(i)A church, an interchurch organi-
zation of local units of a church, a
convention or association of churches,
or an integrated auxiliary of a church
(as defined in paragraph (h) of this
section);
******
(vii) An educational organization
(below college level) that is described
in section 170(b)(1)(A)(ii), that has a
program of a general academic nature,
and that is affiliated (within the mean-
ing of paragraph (h)(2) of this section)
with a church or operated by a
religious order.
******
(h)Integrated auxiliary—(1) In gen-
eral. For purposes of this title, the term
integrated auxiliary of a church means
an organization that is—
(i) Described both in sections
501(c)(3) and 509(a)(1), (2), or (3);

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(ii)Affiliated with a church or a con-
vention or association of churches; and
(iii)Internally supported.
(2)Affiliation. An organization is af-
filiated with a church or a convention or
association of churches, for purposes of
paragraph (h)(1)(ii) of this section, if—
(i)The organization is covered by a
group exemption letter issued under
applicable administrative procedures,
(such as Rev. Proc. 80–27 (1980–1
C.B. 677); See §601.601(a)(2)(ii)(b)),
to a church or a convention or associa-
tion of churches;
(ii)The organization is operated,
supervised, or controlled by or in
connection with (as defined in
§1.509(a)–4) a church or a convention
or association of churches; or
(iii) Relevant facts and circumstances
show that it is so affiliated.
(3)Facts and circumstances. For
purposes of paragraph (h)(2)(iii) of this
section, relevant facts and circum-
stances that indicate an organization is
affiliated with a church or a convention
or association of churches include the
following factors. However, the ab-
sence of one or more of the following
factors does not necessarily preclude
classification of an organization as
being affiliated with a church or a con-
vention or association of churches—
(i)The organization’s enabling in-
strument (corporate charter, trust instru-
ment, articles of association, constitu-
tion or similar document) or by-laws
affirm that the organization shares
common religious doctrines, principles,
disciplines, or practices with a church
or a convention or association of
churches;
(ii)A church or a convention or
association of churches has the au-
thority to appoint or remove, or to
control the appointment or removal of,
at least one of the organization’s
officers or directors;
(iii)The corporate name of the
organization indicates an institutional
relationship with a church or a conven-
tion or association of churches;
(iv)The organization reports at least
annually on its financial and general
operations to a church or a convention
or association of churches;
(v)An institutional relationship be-
tween the organization and a church or
a convention or association of churches
is affirmed by the church, or conven-
tion or association of churches, or a
designee thereof; and
(vi)In the event of dissolution, the
organization’s assets are required to be
distributed to a church or a convention
or association of churches, or to an
affiliate thereof within the meaning of
this paragraph (h).
(4)Internal support. An organization
is internally supported, for purposes of
paragraph (h)(1)(iii) of this section,
unless it both—
(i)Offers admissions, goods, serv-
ices or facilities for sale, other than on
an incidental basis, to the general
public (except goods, services, or facil-
ities sold at a nominal charge or for an
insubstantial portion of the cost); and
(ii)Normally receives more than 50
percent of its support from a combina-
tion of governmental sources, public
solicitation of contributions, and re-
ceipts from the sale of admissions,
goods, performance of services, or
furnishing of facilities in activities that
are not unrelated trades or businesses.
( 5 )S p e c i a l r u l e. M e n ’ s a n d
women’s organizations, seminaries,
mission societies, and youth groups
that satisfy paragraphs (h)(1)(i) and (ii)
of this section are integrated auxiliaries
of a church regardless of whether such
an organization meets the internal
support requirement under paragraph
(h)(1)(iii) of this section.
(6)Effective date. This paragraph (h)
applies for returns filed for taxable
years beginning after December 31,
1969. For returns filed for taxable
years beginning after December 31,
1969 but beginning before December
20, 1995, the definition for the term
integrated auxiliary of a church set
forth in §1.6033–2(g)(5) (as contained
in the 26 CFR edition revised as of
April 1, 1995) may be used as an
alternative definition to such term set
forth in this paragraph (h).
(7)Examples of internal support.
The internal support test of this para-
graph (h) is illustrated by the following
examples, in each of which it is
assumed that the organization’s provi-
sion of goods and services does not
constitute an unrelated trade or
business:
Example 1. Organization A is described in
sections 501(c)(3) and 509(a)(2) and is affiliated
(within the meaning of this paragraph (h)) with a
church. Organization A publishes a weekly
newspaper as its only activity. On an incidental
basis, some copies of Organization A’s publica-
tion are sold to nonmembers of the church with
which it is affiliated. Organization A advertises
for subscriptions at places of worship of the
church. Organization A is internally supported,
regardless of its sources of financial support,
because it does not offer admissions, goods,
services, or facilities for sale, other than on an
incidental basis, to the general public. Organiza-
tion A is an integrated auxiliary.
Example 2. Organization B is a retirement
home described in sections 501(c)(3) and
509(a)(2). Organization B is affiliated (within the
meaning of this paragraph (h)) with a church.
Admission to Organization B is open to all
members of the community for a fee. Organiza-
tion B advertises in publications of general
distribution appealing to the elderly and main-
tains its name on non-denominational listings of
available retirement homes. Therefore, Organiza-
tion B offers its services for sale to the general
public on more than an incidental basis. Organi-
zation B receives a cash contribution of $50,000
annually from the church. Fees received by
Organization B from its residents total $100,000
annually. Organization B does not receive any
government support or contributions from the
general public. Total support is $150,000
($100,000 + $50,000), and $100,000 of that total
is from receipts from the performance of services
(66–2/3% of total support). Therefore, Organiza-
tion B receives more than 50 percent of its
support from receipts from the performance of
services. Organization B is not internally sup-
ported and is not an integrated auxiliary.
Example 3. Organization C is a hospital that is
described in sections 501(c)(3) and 509(a)(1).
Organization C is affiliated (within the meaning
of this paragraph (h)) with a church. Organiza-
tion C is open to all persons in need of hospital
care in the community, although most of
Organization C’s patients are members of the
same denomination as the church with which
Organization C is affiliated. Organization C
maintains its name on hospital listings used by
the general public, and participating doctors are
allowed to admit all patients. Therefore, Organi-
zation C offers its services for sale to the general
public on more than an incidental basis. Organi-
zation C annually receives $250,000 in support
from the church, $1,000,000 in payments from
patients and third party payors (including Medi-
care, Medicaid and other insurers) for patient
care, $100,000 in contributions from the public,
$100,000 in grants from the federal government
(other than Medicare and Medicaid payments)
and $50,000 in investment income. Total support
is $1,500,000 ($250,000 + $1,000,000 +
$100,000 + $100,000 + $50,000), and $1,200,000
($1,000,000 + $100,000 + $100,000) of that total
is support from receipts from the performance of
services, government sources, and public contri-
butions (80% of total support). Therefore,
Organization C receives more than 50 percent of
its support from receipts from the performance of
services, government sources, and public contri-
butions. Organization C is not internally sup-
ported and is not an integrated auxiliary.
******
Margaret Milner Richardson,
Commissioner of
Internal Revenue.
Approved November 27, 1995.
Leslie Samuels,
Assistant Secretary of
the Treasury.

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(Filed by the Office of the Federal Register on
December 19, 1995, 8:45 a.m., and published
in the issue of the Federal Register for
December 20, 1995, 60 F.R. 65550)
Section 7121.—Closing Agreements
26 CFR 301.7121–1: Closing agreements.
What is the method by which a taxpayer
requests early referral of one or more unagreed
issues from Examination to Appeals? See Rev.
Proc. 96–9, page 15.
Section 7520.—Valuation Tables
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 8.
26 CFR 1.7520–3: Limitation on the
application of section 7520.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which hold that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, this page.
26 CFR 20.7520-3: Limitation on the
application of section 7520.
(Also §§170, 642, 664, 2031, 2512; 1.170A–1,
1.170A–6, 1.642(c)–6, 1.664–1, 20.2031–7,
25.2512–5, 1.7520–3, 25.7520–3.)
Valuation of annuities. Interest for
life or a term of years, and remainder
and reversionary interests when the
individual, who is the measuring life, is
terminally ill. Rev. Ruls. 80–80 and
66–307 are obsolete effective Decem-
ber 14, 1995.
Rev. Rul. 96–3
Rev. Rul. 80–80, 1980–1 C.B. 194,
and Rev. Rul. 66–307, 1966–2 C.B.
429, hold that the valuation tables in the
regulations for valuing annuities, inter-
ests for life or a term of years, and
remainder or reversionary interests are
not to be used if the individual, who is
the measuring life, is known to be
terminally ill at the time of the transfer.
These revenue rulings have been super-
seded by § 20.7520–3(b)(3) of the
Estate Tax Regulations, effective with
respect to estates of decedents dying
after December 13, 1995. Similar provi-
sions are set forth in §§1.7520–3(b)(3)
of the Income Tax Regulations and
25.7520–3(b)(3) of the Gift Tax Regula-
tions. Section 1.7520–3(b)(3) is effective
with respect to transactions after De-
cember 13, 1995 and §25.7520–3(b)(3)
is effective with respect to gifts made
after December 13, 1995.
EFFECT ON OTHER REVENUE
RULINGS
Rev. Rul. 80–80, 1980–1 C.B. 194,
and Rev. Rul. 66–307, 1966–2 C.B.
429 are obsolete effective December
14, 1995.
DRAFTING INFORMATION
The principal author of this revenue
ruling is William L. Blodgett of the
Office of Assistant Chief Counsel
(Passthroughs and Special Industries).
For further information regarding this
revenue ruling contact Mr. Blodgett on
(202) 622-3090 (not a toll-free call).
26 CFR 25.7520–3: Limitation on the
application of section 7520.
Rev. Rul. 80–80, 1980–1 C.B. 194, and Rev.
Rul. 66–307, 1966–2 C.B. 429, which hold that
the valuation tables in the regulations for valuing
annuities, interests for life or a term of years,
and remainder or reversionary interests are not to
be used if the individual, who is the measuring
life, is known to be terminally ill at the time of
the transfer, are obsolete effective December 14,
1995. See Rev. Rul. 96–3, this page.
Section 7872.—Treatment of
Loans with Below-Market
Interest Rates
The adjusted applicable federal short-term,
mid-term, and long-term rates are set forth for
the month of January 1996. See Rev. Rul. 96–6,
page 00.

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Part III.Administrative, Procedural, and Miscellaneous
Weighted Average Interest Rate Update
Notice 96–2
Notice 88–73 provides guidelines for
determining the weighted average inter-
est rate and the resulting permissible
range of interest rates used to calculate
current liability for the purpose of
t h e f u l l f u n d i n g l i m i t a t i o n o f
§ 412(c)(7) of the Internal Revenue
Code as amended by the Omnibus
Budget Reconciliation Act of 1987 and
as further amended by the Uruguay
Round Agreements Act, Pub. L. 103–
465 (GATT).
The average yield on the 30-year
Treasury Constant Maturities for
November 1995 is 6.26 percent.
The following rates were determined
for the plan years beginning in the
month shown below.
MonthYear
Weighted
Average
90% to 109%
Permissible
Range
90% to 110%
Permissible
Range
December19957.096.38 to 7.736.38 to 7.80
Drafting Information
The principal author of this notice is
Donna Prestia of the Employee Plans
Division. For further information re-
garding this notice, call (202) 622-6076
between 2:30 and 4:00 p.m. Eastern
time (not a toll-free number). Ms.
Prestia’s number is (202) 622-7377
(also not a toll-free number).
26 CFR 601.105: Examination of returns and
claims for refund, credit, or abatement;
determination of correct tax liability.
(Also Part I, Section 7121; 301.7121–1.)
Rev. Proc. 96–9
TABLE OF CONTENTS
SECTION 1. PURPOSE
SECTION 2. SCOPE OF EARLY
REFERRAL PROCEDURES
.01In general
.02 Appropriate issues for early
referral
.03Issues excluded from early referral
SECTION 3. PROCEDURES FOR
REQUESTING EARLY REFERRAL
.01Initiating the early referral request
.02Statement of issues and position
.03Perjury statement
.04Signatures
SECTION 4. PROCESSING AN EARLY
REFERRAL REQUEST
.01Approving or denying the request
for early referral
.02Notification of action
.03No appeal
SECTION 5. TRANSFERRING THE
ISSUE FROM EXAMINATION TO
APPEALS
.01In General
.02Examination issues Notice of Pro-
posed Adjustment (Form 5701)
.03Taxpayer response to Form 5701
.04Early referral file sent to Appeals
SECTION 6. RESOLVING THE EARLY
REFERRAL ISSUE(S)
.01 In general
.02 Agreement reached
.03 Agreement not reached
SECTION 7. EFFECT OF ISSUANCE OF
A 30-DAY LETTER BY EXAMINATION
SECTION 8. WITHDRAWAL FROM THE
EARLY REFERRAL PROCESS
SECTION 9. NO USER FEE
SECTION 10. EFFECT ON OTHER
DOCUMENTS
SECTION 11. EFFECTIVE DATE,
FUTURE ACTION
SECTION 1. PURPOSE
Early referral is a process to resolve
Coordinated Examination Program
(CEP) cases more expeditiously
through Examination and Appeals
working simultaneously. This revenue
procedure describes the method by
which a taxpayer requests early referral
of one or more unagreed issues from
Examination to Appeals. This revenue
procedure does not alter the District
Director’s authority to audit the returns
of a taxpayer nor limit or expand the
District Director’s authority to resolve
any issues, including the authority in
Delegation Order No. 236, 1991–1 C.B.
313.
SECTION 2. SCOPE OF EARLY
REFERRAL PROCEDURES
.01In general. Except as provided
in section 2.03, a taxpayer may request
early referral of any developed, un-
agreed issue under the jurisdiction of
the District Director arising from an
examination (audit). Examination will
continue to develop other issues arising
in the audit. Early referral is:
(1)optional;
(2)initiated by the taxpayer;
(3)subject to the approval of both
the District Director and the Assistant
Regional Director of Appeals-Large
Case (ARDA); and
(4)limited to CEP taxpayers.
.02Appropriate issues for early re-
ferral. Appropriate issues for early
referral include those that:

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(1)if resolved, can reasonably be
expected to result in a quicker re-
solution of the entire case; and
(2)both the taxpayer and the District
Director agree should be referred to
Appeals early.
Industry Specialization Program
(ISP) and Appeals Coordinated Issues
(ACIs) can be referred to Appeals for
early resolution under these early refer-
ral procedures. ISP issues are listed in
Exhibit 8700–1 and ACIs are listed in
Exhibit 8700–4 of the Internal Revenue
Manual.
.03 Issues excluded from early
referral. Early referral does not apply
to:
(1)an issue designated for litigation
by the Office of Chief Counsel; or
(2)issues for which the taxpayer has
filed a request for Competent Authority
assistance, or issues for which the
taxpayer intends to seek Competent
Authority assistance. Taxpayers are
encouraged to request the simultaneous
Appeals/Competent Authority proce-
dure described in section 8 of An-
nouncement 95–9, 1995–7 I.R.B. 57 or
a subsequent revenue procedure. If a
taxpayer enters into a settlement with
Appeals (including an Appeals settle-
ment through the early referral proc-
ess), and then requests Competent
Authority assistance, the U.S. compe-
tent authority will endeavor only to
obtain a correlative adjustment with the
treaty country and will not take any
actions that would otherwise amend the
settlement. See section 7.05 of An-
nouncement 95–9.
SECTION 3. PROCEDURES FOR
REQUESTING EARLY REFERRAL
.01Initiating the early referral re-
quest. A request for early referral must
be submitted in writing by the CEP
taxpayer to the CEP case manager. The
CEP case manager may suggest that a
CEP taxpayer make such a request.
.02Statement of issues and posi-
tion. An early referral request must:
(1)state the issues for which early
referral is requested;
(2)identify the taxpayer (and, where
applicable, all related persons involved
in the issue(s)) and the tax period(s) to
which those issues relate; and
(3)describe the taxpayer’s and the
Service’s position with regard to the
relevant early referral issues. This
statement must contain a brief dis-
cussion of the material facts and an
analysis of the facts and law as they
apply to the early referral issues.
.03Perjury Statement. The early
referral request, and any supplemental
submission (including additional docu-
ments), must include a declaration in
the following form:
Under penalties of perjury, I
declare that I have examined this
request [or submission], includ-
ing accompanying documents,
and to the best of my knowledge
and belief, the facts presented
are true, correct, and complete.
This declaration must be signed by any
person currently authorized to sign the
taxpayer’s federal income tax returns.
.04Signatures. A request for early
referral must be signed by the taxpayer
or the taxpayer’s authorized representa-
tive. It is preferred that Form 2848,
Power of Attorney and Declaration of
Representative, be used with regard to
an early referral request under this
revenue procedure.
SECTION 4. PROCESSING AN EARLY
REFERRAL REQUEST
.01Approving or denying the re-
quest for early referral. An approval of
an early referral request requires the
concurrence of both the District Direc-
tor and the ARDA. The early referral
request will be processed as follows:
(1)The CEP case manager will send
the taxpayer’s request for early referral
to the District Director. The CEP case
manager also may include a recommen-
dation that the early referral request be
approved or denied.
(2)The District Director will note
the district’s approval or denial and
forward the request, whether approved
o r d e n i e d , t o t h e A R D A f o r
consideration.
(3)The ARDA will note his or her
approval or denial of the early referral
request and will return the request to
the CEP case manager.
.02Notification of action. The CEP
case manager will advise the taxpayer
of the decision generally within 45
days of receipt of the request. If any
issue is approved, the CEP case man-
ager will forward the early referral file
for this issue to Appeals as described
in section 5 below. If the request for
early referral is denied with respect to
any issue, the taxpayer retains the right
to pursue the administrative appeal of
any proposed deficiency related to that
issue at a later time.
.03No Appeal. There is no formal
taxpayer appeal if the early referral
request is denied in whole or in part;
however, the taxpayer can request a
conference with the organization(s) that
denied the early referral request.
SECTION 5. TRANSFERRING THE
ISSUE FROM EXAMINATION TO
APPEALS
.01In General. Jurisdiction over the
issues accepted will be transferred from
Examination to Appeals, and the proce-
dures set forth in sections 5.02 through
5.04 will apply.
.02Examination issues Notice of
Proposed Adjustment (Form 5701).
Examination will complete a Notice of
Proposed Adjustment (Form 5701), for
each approved early referral issue,
generally within 30 days after the CEP
case manager advises the taxpayer of
the approved early referral request.
Examination will send the Form 5701
to the taxpayer. The Form 5701 will
describe the issue and explain Ex-
amination’s proposed adjustment.
The issuance of the Form 5701 for
the early referral issue is not treated as
the first letter of proposed deficiency
for purposes of computing increased
interest under §6621(c).
.03 Taxpayer response to Form
5701. The taxpayer must respond in
writing to Examination’s proposed ad-
justment to each issue set forth in the
Form 5701. The response must contain
an explanation of the taxpayer’s posi-
tion regarding the issues, similar to that
which would be provided in an Appeals
protest. The response shall be submit-
ted to the CEP case manager within 30
days (unless extended by the CEP case
manager) from the date that the pro-
posed adjustment (Form 5701) is sent
to the taxpayer. The procedural require-
ments of sections 3.03 and 3.04 of this
revenue procedure (perjury statement
and signatures) also apply to the
taxpayer’s response to the Form 5701.
If a response is not received for any
issue within the time provided, the
taxpayer’s early referral request will be
considered withdrawn regarding that
particular issue without prejudice to the
taxpayer’s right to an administrative
appeal at a later date. See section 8,
Withdrawal from the Early Referral

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Process, regarding withdrawal after
Appeals has taken jurisdiction over an
early referral issue.
.04Early referral file sent to Ap-
peals. Once the taxpayer has responded
to the Form 5701, Examination will
send the early referral file to Appeals.
Appeals will then take jurisdiction over
the issues accepted for early referral.
All other issues in the case remain in
Examination’s jurisdiction. The early
referral file should include copies of:
(1)applicable portions of tax returns
and workpapers;
(2) the approved early referral
request;
(3)the Form 5701;
(4)the taxpayer’s written response
to the Form 5701;
(5)Examination’s response to the
taxpayer’s position, if any; and
(6)an estimate of the potential tax
effect of the proposed adjustment.
SECTION 6. RESOLVING THE EARLY
REFERRAL ISSUE
.01In general. The taxpayer’s writ-
ten response to the Form 5701 gener-
ally serves the same purpose as an
Appeals protest. Established Appeals
procedures, including those governing
submissions and taxpayer conferences,
apply to early referral issues. See
§ 601.106 et seq of the Statement of
Procedural Rules.
.02 Agreement reached.
(1)If an agreement is reached with
respect to an early referral issue, a
specific matters closing agreement
(Form 906) will be prepared. See
§ 7121 and also Rev. Proc. 68–16,
1968–1 C.B. 770, which describes the
preparation of closing agreements. The
closing agreement will be used to
compute the corrected tax as a partial
agreement prior to or concurrently with
the resolution of any other issues in the
case.
(2)If an early referral issue results
in a refund or credit requiring a report
described in §6405 that must be
submitted to the Joint Committee on
Taxation, the report must include a
copy of the proposed closing agreement
signed by or for the taxpayer, but not
signed by or on behalf of the Commis-
sioner. The Service will not sign the
proposed agreement until after review
by the Joint Committee.
.03Agreement not reached. If an
agreement is not reached with respect
to an early referral issue:
(1)Appeals will close the early
referral file and return jurisdiction over
the issue to Examination. Appeals will
send a copy of the Appeals Case
Memorandum for the issue to the CEP
case manager.
(2)Appeals will not reconsider an
unagreed early referral issue if the
entire case is later protested to Ap-
peals, unless there has been a substan-
tial change in the circumstances regard-
ing the early referral issue.
SECTION 7. EFFECT OF CONCLUSION
OF EXAMINATION
If Examination issues a preliminary
notice of deficiency (‘‘30-day letter’’)
with respect to any issue that is not
accepted for early referral, all unagreed
issues, including any early referral
issues that have not yet been settled by
Appeals, will be combined in the 30-
day letter. Likewise, if no issues in the
case remain unagreed except for the
early referral issues that are pending in
Appeals, a 30-day letter will be issued
solely with respect to the early referral
issues. The issuance of the 30-day
letter generally will constitute the first
letter of proposed deficiency which
allows the taxpayer an opportunity for
administrative review for purposes of
the increased underpayment rate for
large corporate underpayments under
§ 6621(c).
Except as provided in section
6.03(2), once Appeals assumes jurisdic-
tion over the case, all issues, including
all early referral issues that have not
yet been settled by Appeals, will be
considered under established Appeals
procedures.
If no issues in the case remain
unagreed except for an early referral
issue that could not be settled by
Appeals and has been returned to
Examination, no 30-day letter will be
issued. Rather, a statutory notice of
deficiency (‘‘90-day letter’’) will be
issued, which will start the period for
the increased underpayment rate for
large corporate underpayments under
§ 6621(c).
SECTION 8. WITHDRAWAL FROM THE
EARLY REFERRAL PROCESS
If the taxpayer withdraws its early
referral request with respect to one or
more of the early referral issues after
Appeals has taken jurisdiction over the
issues, such withdrawal will be treated
in the same manner as if no agreement
of those early referral issues was
reached. See section 6.03, Agreement
not reached. The withdrawal request
must be communicated in writing to the
ARDA. See section 5.03, Taxpayer
response to Form 5701, regarding a
withdrawal without prejudice prior to
Appeals taking jurisdiction over the
issue(s).
SECTION 9. NO USER FEE
There is no user fee for an early
referral request.
SECTION 10. EFFECT ON OTHER
DOCUMENTS
Announcement 94–41, 1994–12
I.R.B. 7, is superseded.
SECTION 11. EFFECTIVE DATE,
FUTURE ACTION
This revenue procedure is effective
for requests for early referral filed after
January 8, 1996, the date this revenue
procedure is published in the Internal
Revenue Bulletin. Additional guidance
may be issued to supplement or modify
the procedures set forth in this revenue
procedure in order to extend the early
referral program.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Thomas C. Louthan, Di-
rector, Office of International, TEFRA,
and Dispute Resolution Programs, Na-
tional Office Appeals. For further
information regarding this revenue pro-
cedure, please contact Mr. Louthan at
(202) 401-4098 (not a toll-free
number).
26 CFR 601.602: Forms and instructions.
(Also Part 1, Section 6033; 1.6033–2)
Rev. Proc. 96–10
SECTION 1. PURPOSE
The purpose of this revenue proce-
dure is to list a class of organizations,
affiliated with a church or convention
or association of churches and exempt
from federal income tax under section
501(c)(3) of the Internal Revenue
Code, that is not required to file an
annual information return on Form 990,

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Return of Organizations Exempt from
Income Tax. This revenue procedure
supplements Rev. Proc. 83–23, 1983–1
C.B. 687, and obsoletes Rev. Proc. 86–
23, 1986–1 C.B. 564.
SEC. 2. BACKGROUND
.01Section 6033(a)(1) of the Code
generally requires all tax-exempt orga-
nizations to file an annual information
return on Form 990.
.02 Section 6033(a)(2)(A) of the
Code provides certain mandatory ex-
ceptions to this filing requirement,
specifically for churches, their inte-
grated auxiliaries, and conventions or
associations of churches.
.03 Section 6033(a)(2)(B) of the
Code provides discretionary exceptions
from filing such returns where the
Secretary ‘‘determines such filing is
not necessary to the efficient admin-
istration of the internal revenue laws.’’
Section 1.6033–2(g)(6) of the Income
Tax Regulations delegates authority to
the Commissioner to excuse organiza-
tions from the filing requirement. It
provides that ‘‘the Commissioner may
relieve any organization or class of
organizations from filing, in whole or
in part, the annual information return
required by section 6033 where he
determines that such returns are not
necessary for the efficient administra-
tion of the internal revenue laws.’’
.04Section 1.6033–2(g)(1) of the
regulations provides a partial list of
organizations that are not required to
file annual returns either because they
are excepted by statute or because the
Commissioner has exercised the au-
thority referred to above in Sec. 2.03.
A more complete list is contained in
Rev. Proc. 83–23, 1983–1 C.B. 687.
.05A return filing exception for
certain church-affiliated organizations
engaged exclusively in managing funds
or maintaining retirement programs was
announced originally in Notice 84–2,
1984–1 C.B. 331. That exemption was
carried over into Rev. Proc. 86–23,
which superseded Notice 84–2. Rev.
Proc. 86–23 also defined what is an
integrated auxiliary of a church for
purposes of the filing exception
provided in section 6033(a)(2)(A).
Treas. Reg. §1.6033–2(h) now has
incorporated the definition of integrated
auxiliary of a church, making Rev.
Proc. 86–23 partially obsolete. Accord-
ingly, this revenue procedure replaces
Rev. Proc. 86–23, preserving the filing
exemption that remains in effect for
certain church-affiliated organizations
that manage funds and retirement pro-
grams and deleting those portions of
Rev. Proc. 86–23 that are now part of
the regulations. Some organizations
exempted from filing by this revenue
procedure may also qualify as inte-
grated auxiliaries exempt from filing
under section 6033(a)(2)(A).
SEC. 3. ORGANIZATIONS
EXCUSED FROM FILING
.01The following organizations will
not be required to file Form 990:
(1)An organization described in
section 501(c)(3) that is operated,
supervised, or controlled by one or
more churches, integrated auxiliaries,
or conventions or associations of
churches, and
(a)is engaged exclusively in financ-
ing, funding the activities of, or manag-
ing the funds of
(i)a church, integrated auxiliary, or
convention or association of churches,
or
(ii)a group of organizations substan-
tially all of which are described in
(1)(a)(i), if substantially all of its assets
are provided by, or held for the benefit
of, organizations described in (1)(a)(i);
or
(b)maintains retirement insurance
programs primarily for organizations
described in (1)(a)(i), and
(i)more than 50 percent of the
individuals covered by the programs
are directly employed by those organi-
zations, or
(ii)more than 50 percent of the
assets are contributed by, or held for
the benefit of, employees of those
organizations.
(2)An organization described in
section 501(c)(3) that is operated,
supervised or controlled by one or
more religious orders and is engaged in
financing, funding, or managing assets
used for exclusively religious activities.
.02For purposes of this revenue
procedure, an integrated auxiliary is an
organization that meets the definition
contained in Treas. Reg. §1.6033–2(h).
SEC. 4. EFFECTIVE DATE
This revenue procedure is effective
for tax years beginning after December
20, 1995, the date of publication of
final Treas. Reg. §1.6033–2(h) in the
Federal Register.
S E C . 5 . E F F E C T O N O T H E R
DOCUMENTS
Rev. Proc. 83–23 is supplemented.
Rev. Proc. 86–23 is rendered obsolete
as of the effective date set forth above
in Sec. 4.
DRAFTING INFORMATION
The principal author of this revenue
procedure is John Francis Reilly of the
Exempt Organizations Division. For
further information regarding this reve-
nue procedure contact Mr. Reilly on
(202) 622-7352 (not a toll-free call).
26 CFR 601.602: Tax forms and instructions.
Rev. Proc. 96–11
NOTE: This revenue procedure may be
used to prepare Tax Year 1995
Form 1042–S for submission to Inter-
nal Revenue Service (IRS) using any of
the following:
Magnetic Tape
Tape Cartridge
5
1
⁄4-inch Diskette
3
1
⁄2-inch Diskette
Electronic Filing
*(Bisynchronous)
*(Asynchronous)
Please read this publication carefully.
Persons required to file may be sub-
ject to penalties for failure to file or
failure to include correct information if
they do not follow the instructions in
this revenue procedure.
PLEASE NOTE:
ALL CHANGES IN THE PUBLI-
C A T I O N , F O R M A T A N D
EDITORIAL, HAVE BEEN HIGH-
LIGHTED BY THE USE OF ITALICS
AND DOUBLE UNDERLINES.
Contents
Part A. General
Section 1.Purpose
Section 2.Nature of Changes—
Current year (Tax Year
1 9 9 5)
Section 3.Where to File and How
to Contact the IRS Mar-
t i n s b u r g C o m p u t i n g
Center (IRS/MCC)

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Section 4.Filing Requirements
Section 5.Form 8508, Request
for Waiver from Filing
Information Returns on
Magnetic Media
Section 6.Vendor List
Section 7.Form 4419, Applica-
tion for Filing In-
formation Returns
Magnetically/Elec-
tronically
Section 8.Test Files
Section 9.Filing of Form 1042–S
Magnetically/Electroni-
cally and Retention
Requirements
Section 10.Due Dates
Section 11.Extensions of Time to
File
Section 12.Processing of Form
1042–S Magnetically/
Electronically
Section 13.Corrected Returns
Section 14.Effect on Paper Docu-
ments
Section 15.Definition of Terms
Section 16.Major Problems En-
countered
Part B.Magnetic Media Specifications
Section 1.General
Section 2.Tape Specifications
Section 3.Tape Cartridge Specifi-
cations
Section 4.5
1
⁄4- and 3
1
⁄2-Inch Dis-
kette Specifications
Section 5.Data Sequence Specifi-
cations
Section 6.The Transmitter ‘‘T’’
Record
Section 7.Recipient ‘‘Q’’ Record
Section 8.Withholding Agent
‘‘W’’ Record
Section 9.End of Transmission
‘‘Y’’ Record
Part C. Bisynchronous (Mainframe)
Electronic Filing Specifications
Section 1.General
Section 2.Electronic Filing Ap-
proval Procedure
Section 3.Test Files
Section 4.Electronic Submissions
Section 5.Transmittal
Requirements
Section 6.
IBM 3780 Bisyn-
chronous Communi-
cation Specifications
Section 7.Bisynchronous Elec-
tronic Filing Record
Specifications
Part D. Asynchronous (IRP–BBS)
E l e c t r o n i c F i l i n g S p e c i f i c a t i o n s
Section 1.General
Section 2.Electronic Filing Ap-
proval Procedure
Section 3.Test Files
Section 4.Electronic Submissions
Section 5.Transmittal
Requirements
Section 6.Information Reporting
Program Bulletin
Board System (IRP–
BBS) Specifications
Section 7.IRP–BBS First Logon
Procedures
Part E. Magnetic/Electronic Specifica-
tion for Extension Of Time
Section 1.General Information
Section 2.Magnetic Tape, Tape
Cartridge, 5
1
⁄4- and
3
1
⁄2-inch Diskette, and
IRP–BBS Specifications
Section 3.Record Layout
PART A. GENERAL
SECTION. 1. PURPOSE
.01The purpose of this revenue
procedure is to provide the specifica-
tions under which withholding agents
may file Form 1042–S, Foreign Per-
son’s U.S. Source Income Subject to
W i t h h o l d i n g , M a g n e t i c a l l y o r
Electronically.
.02This revenue procedure super-
sedes the following: Rev. Proc. 93–16
1993–8 C.B. 844, published as Pub.
1187 (02–93), Specifications for Filing
Form 1042–S, Foreign Person’s U.S.
Source Income Subject to Withholding,
Electronically or on Magnetic Tape,
and 5
1
⁄4-, or 3
1
⁄2-Inch Magnetic
Diskettes.
.03Revenue procedures are gener-
ally revised annually to reflect legisla-
tive and form changes. Comments con-
cerning this revenue procedure, or
suggestions for making it more helpful
and user friendly, can be addressed to
Internal Revenue Service, Martinsburg
Computing Center, P. O. Box 1359,
Martinsburg, WV 25401 ATTN: Infor-
mation Returns Branch, Mail Stop 360.
.04It is unlawful to intentionally
transmit a computer virus to the
Internal Revenue Service. Violators
may be subject to a fine and/or
imprisonment.
SEC. 2. NATURE OF CHANGES—
CURRENT YEAR (TAX YEAR
1995)
.01In this publication, all pertinent
changes from the last revision have
been highlighted by the use of italics
and double underline. This has been
done for the convenience of the filers
in identifying new information. Filers
are still advised to read the publica-
tion in its entirety.
.02EDITORIAL CHANGES—GENERAL
The following changes have been
made to the revenue procedure:
a)In Contents, Part A. General—
Section 6. Vendor List has been added
to provide guidance to those filers who
may need assistance or must engage a
vendor to file on their behalf.
b)Part A. Sec. 3.01—The closing
hour of operation at IRS/MCC has
changed from 6:00 p.m. to 4:30 p.m.
Eastern Time.
c)Part A. Sec. 3.07—Text regard-
ing the Information Reporting Program
Centralized Call Site has been updated
to reflect the change from a pilot
operation in select areas of the country,
to a nationwide service for the payer
community.
d)Part A. Sec. 4.01—A paragraph
has been added to inform the withhold-
ing agents of filing requirements with
regard to the threshold of 250 returns.
A NOTE was added to make filers
aware of the penalty which may be
imposed when failing to comply.
e)Part A. Sec. 4.04—A note has
been added for filers, who may engage
a service bureau to file on their behalf,
to be sure not to file duplicate data.
f)Part A. Sec. 5.08—A statement
has been added advising transmitters,
who have received a waiver approval
letter, to keep it on file.
g)Part A. Sec. 9.01—A statement
has been added alerting filers of the
importance of signing Form 4804. A
NOTE was also added to direct filers to

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indicate the correct tax year on com-
puter generated forms.
h)Part A. Sec. 9.07—Statements
have been inserted regarding the Notice
210.
i)Part A. Sec. 9.11—Information
instructing filers on retention of returns
filed or the ability to reconstruct was
added.
j)Part A. Sec. 10.02—A state-
ment to alert filers regarding the use of
a delivery service other than U. S.
Postal has been added to emphasize the
importance of the postmark in relation-
ship to the due date of the return.
k)Part A. Sec. 10.04—A qualify-
ing statement has been included in the
event the due date of March 15 occurs
on a legal holiday, Saturday or Sunday.
l)Part A. Sec. 11—Information
for submitting a request for Extension
of Time to File Form 1042 and Form
1042S has changed to reflect the
correct procedures to follow.
m)Part A. Sec. 11.01—A signifi-
cant change was added requiring filers
requesting an extension of time for
more than 50 withholding agents to do
so magnetically or electronically.
n)Part A. Sec. 11.14—The state-
ment regarding extension of time to file
for Form 1042, Annual Withholding
Tax Return for U. S. Source Income of
Foreign Persons, has been changed for
greater clarity.
o)Part A. Sec 13—Corrected Re-
turns has been revised. PLEASE READ
THIS SECTION CAREFULLY.
p)Part A. Sec. 15—Additional
words and definitions have been added
for clarification in the use of this
publication.
q)Part A. Sec 16—Major Prob-
lems Encountered has been revised.
PLEASE READ THIS SECTION
CAREFULLY.
. 0 3 E D I T O R I A L C H A N G E S —
MAGNETIC MEDIA SPECIFICATIONS
a)Throughout the publication, the
beginning ‘‘number 22’’ has been
added to explain that all magnetic and
electronic filing of Form 1042–S re-
quires a Transmitter Control Code
(TCC) beginning with the numbers
‘‘22’’.
b)Part B. Sec. 1.03—Moved virus
information to Part A, Section 1.04,
and deleted the statement indicating
IRS/MCC will return media which has
been found to be contaminated with a
virus.
c)Part B. Sec. 2, Tape Specifi-
cations,—Changed BPI to CPI, ex-
plained compatible tape files, and
labeled and unlabeled tapes.
d) Part B. Sec. 4—5
1
⁄4-inch and
3
1
⁄2-inch Diskette Specifications, .02,
.03, and .04 were added for additional
information.
e)Part B. Sec. 7, Recipient ‘‘Q’’
Record, field positions 113–121,—
Explained the use of Taxpayer Identi-
fication Number and the accompanying
letter.
f)Part B. Sec. 7, field positions
137–138,—Explained the use of OC,
Other Countries.
g)Part B. Sec. 7, field positions
309–323,—Added ‘‘note’’ to use either
the Province or the Province Code for
Canada, not both.
h)Part B. Sec. 7, field positions
324–332,—Added U. S. Territories to
the title.
i)Part B. Sec. 7, field positions
355–356,—Added ‘‘Notes’’ concerning
use of certain income codes.
j)Part B. Sec. 7, field positions
357–358,—Added ‘‘Note’’ concerning
income code 20.
k)Part B. Sec. 7, field position
370,—Added ‘‘Notes’’ for clarification
for certain income codes.
l)Part B. Sec. 8, Withholding
Agent ‘‘W’’ Record, field positions 2–
3,—Changed ‘‘Payment Year’’ to ‘‘Tax
Year’’ for consistency with ‘‘Q’’
Record.
m)Part C. Bisynchronous (Main-
frame) Electronic Filing Specifications
has been added to this publication for
those filers who meet the filing require-
ments for magnetically or electronically
filed media and chose mainframe filing
as their mode of transmission.
n)Part D. Asynchronous (IRP–
BBS) Electronic Filing Specifications
has been added to assist filers who
chose Bulletin Board Filing as the
vehicle of transmission.
o)Part E. Record Format For
Filing Extensions Of Time Magneti-
cally or Electronically has been added
for those filers who must request an
extension for more than 50 withholding
agents.
.04 PROGRAMMING CHANGES—
MAGNETIC MEDIA SPECIFICATIONS
a)Part B. Sec. 3—New section
added, ‘‘Tape Cartridge Specifi-
cations.’’
b)Part B. Sec. 6—Transmitter
‘‘T’’ Record
(1)All ‘‘REQUIRED’’ fields
were identified.
(2)Tax Year, field positions 2–
3,—Must be incremented by one (from
94 to 95) unless reporting for prior
year data.
c)Part B. Sec. 7—Recipient ‘‘Q’’
Record.
(1)All ‘‘Required’’ fields were
identified.
(2)Removed all references to
‘‘two or more consecutive imbedded
blanks between name parts is not
acceptable.’’
(3)Review entire Country Code
List, field positions 137–138, for addi-
tions and deletions.
(4)Added two new recipient
codes, field positions 357–358,—Codes
10 Fiduciary (estate) and 11 Fiduciary
(Other).
(5)Added a new Exemption
Code 5, field position 370, (Portfolio
interest exempt under an Internal Reve-
nue Code Section).
(6)Added new correction in-
dicators, ‘‘V’’ and ‘‘C’’, field position
371, and explained the process of
correcting documents using those
codes.
(7)Clarified ‘‘Note’’ for field
positions 372–373; removed the tax
rate chart, and gave reference to the
location of it in Publication 515. The
Publication 1187 may not be revised
each year.
(8) Added Income Code 16
(Compensation for Independent Per-
sonal Services) to field positions 430–
439 (Foreign Student Withholding Al-
lowance Amount) and field positions
440–449 (Net Income Amount)
d)Part B. Sec. 8—Withholding
Agent ‘‘W’’ Record
(1)All ‘‘REQUIRED’’ fields
were identified.
(2)Tax Year, field positions 2–
3,—Must be incremented by one (from
94 to 95) unless reporting for prior
year data.
e)Part B. Sec. 9—End of Trans-
mission ‘‘Y’’ Record
(1)All ‘‘REQUIRED’’ fields
were identified.
SEC. 3. WHERE TO FILE AND HOW
TO CONTACT THE IRS MARTINSBURG
COMPUTING CENTER (IRS/MCC)
.01All Form 1042–S filed mag-
netically or electronically are processed

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at IRS/MCC. Inquiries concerning ap-
plication procedures, extension of time
to file, request for a waiver from the
magnetic media filing requirements, or
filing procedures specified in this reve-
nue procedure should be directed to
IRS/MCC. Filers may contact IRS/
MCC by telephone at (304) 263-8700
(not a toll free number). The hours of
operation are 8:30 a.m. to4:30
p.m., Eastern Time.
.02Send magnetic media files,
and any correspondence to MCC at the
following addresses:
If by Postal Service:
IRS, Martinsburg Computing
Center
Information Reporting Program
P.O. Box 1359
Martinsburg, WV 25401-1359
or
If by truck or air freight:
IRS, Martinsburg Computing
Center
Information Reporting Program
Route 9 and Needy Road
Martinsburg, WV 25401
.03 This revenue procedure and
other IRS publications concerning mag-
netic and electronic filing of informa-
tion returns are available through the
IRP–BBS as ‘‘downloadable’’ files.
Using IRP–BBS as a means of obtain-
ing publications will provide faster
access to this information. Publications
will be available from IRP–BBS much
earlier than the printed version. The
IRP–BBS is operational 24 hours a
day, 7 days a week. The telephone
number is (304)264-7070
.
.04The IRP–BBS software provides
a menu-driven environment which al-
lows filers to access different parts of
the bulletin board. Whenever possible,
IRS/MCC personnel will provide assist-
ance in resolving communication prob-
lems with IRP–BBS.
.05The telephone number for the
IRS/MCC fax machine is (304) 264-
5 6 0 2
.
.06IRS/MCC has installed Tele-
communications Devices for the Deaf
(TDD). The number is (304) 267-3367.
.07 INFORMATION REPORT-
ING PROGRAM CENTRALIZED
CALL SITE.The Call site is located
at IRS/MCC and operates in conjunc-
tion with the Information Reporting
Program. The Call Site provides serv-
ice to the payer community (financial
institutions, employers, and other trans-
mitters of information returns).
.08The Call Site accepts calls
from all areas of the country. The
number to call is (304) 263-8700 or
Telecommunications Device for the
Deaf (TDD) (304) 267-3367. These are
toll calls. Hours of operation for the
Call Site are Monday through Friday,
8:30 a.m. to 4:30 p.m. Eastern Time.
The Call Site is open throughout the
year to answer questions related to
magnetic media and tax law filing of
Form 1042–S, Questionable W–4’s,
Form 8027, all information returns,
and backup withholding due to missing
and incorrect taxpayer identifications
numbers. Due to the high demand for
assistance at the end of January and
February, it is advisable to call as
soon as possible to avoid these peak
f i l i n g s e a s o n s .
.09For assistance with regard to
the reporting of Form 1042-S, nonresi-
dent alien withholding, magnetic media
filing, and processing requirements,
contact:
Martinsburg Computing Center
Information Reporting Program
TEL: 304-263-8700
FAX: 304-264-5602
.10If you need help with regard
to nonresident alien withholding re
quirements, contact:
Office of the Assistant Commis-
sioner (International)
ATTN: Taxpayer Service Division
950 L’Enfant Plaza South, SW
Washington, D. C. 20024
TEL: 202-874-1460
FAX: 202-874-5440
.11Requests for paper returns, pub-
lications and forms not related to
magnetic media processing MUST be
requested by calling the IRS toll free
n u m b e r 1 - 8 0 0 - T A X F O R M
(1-800-829-3676).
SEC. 4. FILING REQUIREMENTS
.01Under section 6011(e)(2)(A)
of the Internal Revenue Code, any per-
son, including a corporation, part-
nership, individual, estate, and trust,
who is required to file 250 or more in-
formation returns must file such re-
turns magnetically/electronically. With-
holding agents who meet the threshold
of 250 or more Form 1042–S are re-
quired to submit their information
electronically or magnetically. Even if
the withholding agent does not meet
the required filing threshold of 250
documents, IRS encourages them to do
so.
NOTE:Those withholding agents who
are required to file on magnetic media
but fail to do so, and do not have an
approved waiver, may be subject to a
penalty of $50 per return for failure to
file Form 1042–S on magnetic media.
The penalty applies separately to origi-
nal and corrected returns.
.02Filers who are required to
submit their Form 1042–S on magnetic
media may choose to submit their
documents electronically instead. Filers
w h o t r a n s m i t t h e i r i n f o r m a t i o n
electronically are considered to have
satisfied the magnetic media filing
requirements.
.03The filing requirement applies
individually to each reporting entity as
defined by its separate Taxpayer Identi-
fication Number (TIN) (Social Security
Number [SSN] or Employer Identifica-
tion Number [EIN]). For example, if
filing for a corporation with several

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branches or locations and each uses the
same name and EIN, the filer must
aggregate the total volume of returns to
be filed for that EIN and apply the
filing requirement accordingly.
.04This requirement applies sepa-
rately to original and corrected docu-
ments. For example, 300 original
documents are filed magnetically or
electronically. If 200 documents were
filed with erroneous information, cor-
rections may be submitted on paper
forms.
NOTE: IF FILERS MEET THE FILING
REQUIREMENTS AND ENGAGE A
SERVICE BUREAU TO PREPARE
MEDIA ON THEIR BEHALF, THE
FILERS SHOULD NOT REPORT DUPLI-
CATE DATA WHICH MAY CAUSE
P E N A L T Y N O T I C E S T O B E
G E N E R A T E D .
.05These requirements shall not
apply if the withholding agent submits
an application for and is granted an
undue hardship waiver. (See Part A.
Sec. 5.)
.06For additional information on
filing requirements, please refer to the
1995 Paper Instructions for FORM
1042–S.
SEC. 5. FORM 8508, REQUEST FOR
WAIVER FROM FILING INFORMATION
RETURNS ON MAGNETIC MEDIA
.01Withholding agents required
to file Form 1042–S magnetically or
electronically may receive a waiver if
the requirement would create an undue
hardship. The withholding agent may
request a waiver by submitting Form
8508, Request for Waiver From Filing
Information Returns on Magnetic
Media, to IRS/MCC.
.02A separate Form 8508 must be
submitted by each withholding agent.
Filers are encouraged to submit Form
8508 at least 45 days before the due
date of the return.
.03 If a waiver for original
documents is approved, any correc-
tions for the same type of returns
will be covered under this waiver. If
a withholding agent submits the
original Form 1042–S on magnetic
media, corrections, less than 250,
may be submitted on paper. How-
ever, if you can submit your original
returns on magnetic media but not
your corrections, you must request a
waiver for those exceeding the 250.
.04Waivers are evaluated on a
case-by-case basis and are approved or
denied based on regulation criteria set
forth under section 6011(e) of the
Internal Revenue Code. The transmitter
must allow a minimum of 30 days for
IRS/MCC to respond to a waiver
request.
.05Failure to provide all of the
information requested on the Form
8508 and/or the cost estimates, if
applicable, will result in an automatic
denial of the waiver request.
.06An approved waiver will only
provide exemption from magnetic or
electronic filing for one tax year. A
waiver may not be requested for more
than one tax year at a time. If needed,
the withholding agent must apply each
year for a waiver.
.07A copy of Form 8508 may be
obtained by calling 1-800-829-3676.
Form 8508 may be photocopied or
computer-generated as long as it con-
tains all the information requested on
the original form.
.08If a waiver request is ap-
proved, the transmitter should keep
the approval letter on file.
.09An approved waiver from fil-
ing information returns magnetically or
electronically does not provide exemp-
tion from filing; the withholding agent
must still file information returns on
acceptable paper forms with the Phila-
delphia Service Center. Do not include
a copy of the approved waiver with the
paper forms.
SEC. 6. VENDOR LIST
.01IRS/MCC prepares a list of
v e n d o r s w h o s u p p o r t m a g n e t i c
media or electronic filing. This
list contains the names of serv-
i c e b u r e a u s t h a t w i l l p r o d u c e
files on the prescribed types of
magnetic media or via electronic
filing. It also contains the names
of vendors who provide software
packages for payers who wish to
produce magnetic media or elec-
tronic files on their own computer
systems. This list is provided as
as a courtesy and in no way implies
IRS/MCC approval or endorsement.
NOTE: If filers meet the filing
requirements and engage a service
bureau to prepare media on their
behalf, the filers should not report
duplicate data which may cause
penalty notices to be generated.
.02A withholding agent may con-
tact IRS/MCC via telephone or letter
(See Part A. Sec. 3) to acquire the
vendor list (Publication 1582). This in-
formation is also available from the In-
formation Reporting Program Bulletin
Board System (IRP/BBS). Vendor
names will not be provided over
the telephone.

.03A vendor, who offers a soft-
ware package, has the ability to pro-
duce magnetic media for customers, or
has the capability to electronically
file information returns, and would like
to be included on the list, must submit
a written request to IRS/MCC. The re-
quest should be submitted by August 15
and must include:
(a)Company name
(b)Address (include city, state,
and ZIP code)
(c)Telephone number (include
area code)
(d) Contact person
(e)Type(s) of service provided

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(e.g., service bureau and/or software)
(f) Type(s) of media offered
(e.g., magnetic tape, tape cartridge or
5
1
⁄4-, 3
1
⁄2-inch diskettes or elec-
t r o n i c f i l i n g )
.04The vendor list is updated
annually. Therefore, any changes to
information already on the vendor list
must be received by IRS/MCC no later
than August 15 to be included on the
m o s t c u r r e n t v e n d o r l i s t .
SEC. 7. FORM 4419, APPLICATION
FOR FILING INFORMATION RETURNS
MAGNETICALLY/ELECTRONICALLY
.01Withholding agents or their
agents must complete and submit Form
4419, Application for Filing Infor-
mation Returns Magnetically/Elec-
tronically, before they may file Form
1042–S magnetically or electronically.
Applicationsfor tape, tape cartridge,
diskettes, and IRP–BBS may be submit
uted at any time during the year;
however, the Form 4419 must be filed
at least 30 days before March 15 in
order to allow time to receive a
response from IRS/MCC and timely
file the returns.
.02A copy of Form 4419 may be
obtained by calling 1-800-TAX-FORM
(1-800-829-3676). Instructions on the
back of this form should be read care-
fully. This form may be photocopied.
.03The filer will receive an ap-
proval letter that will contain a five-
digit Transmitter Control Code (TCC)
beginning with the numbers ‘‘22’’.DO

NOT SUBMIT Form 1042–S USING A
TCC ASSIGNED FOR THE PURPOSE OF
FILING OTHER INFORMATION RETURNS.
Form 1042–S may not be filed elec-
tronically or magnetically until an
application has been approved and a
TCC assigned. For documents to be
filed electronically using IBM 3780
bisynchronous protocols, Form 4419
must be submitted at least 45 days
prior to the due date of the returns.
A magnetic media reporting package
containing the current revenue proce-
dure, forms, labels, and instructions
will be sent annually to the attention of
the contact person indicated on Form
4419.
.04Once a TCC has been as-
signed, it is not necessary to reapply
each year. If the information provided
on Form 4419 changes, (for example,
the organization’s name or the contact
person) notify IRS/MCC in writing so
the appropriate files may be updated. In
ALL correspondence with IRS/MCC, in-
clude the TCC in order to assist IRS
personnel in locating the correct files.
.05If a withholding agent’s files
are prepared by a service bureau, it
may not be necessary to submit an
application to obtain a TCC. Some
service bureaus will produce files, code
their own TCC on the media, and send
it to IRS/MCC for the withholding
agent. Other service bureaus will pre-
pare magnetic media and return the
media to the withholding agent for
submission to IRS/MCC. These service
bureaus may require the withholding
agent to obtain a TCC to be coded in
the ‘‘T’’ Record. Withholding agents
should contact their service bureaus for
further information.
.06Filers must have a TCC to
transmit data electronically. If a filer
has been assigned a TCC to file
magnetically and later chooses to file
electronically, it is not necessary to
apply for another TCC as long as the
TCC begins with the digits ‘‘22’’.
.07When initial contact is made
with the IRP–BBS, filers will be in-
structed to assign their own password
and do not need prior approval, other
than a valid TCC.
SEC. 8. TEST FILES
.01IRS/MCC does not require test
files but encourages first-time magnetic
media or electronic filers to submit a
test for review prior to the filing
season. IRS/MCC will check the file to
ensure it meets the specifications of
this revenue procedure.
.02Application Form 4419 must
be filed with IRS/MCC and a TCC
must be assigned before test files are
submitted.
.03Approved withholding agents
or their agents may submit test files to
IRS/MCC. IRS/MCC requires that all
test files be submitted between Decem-
ber 1 and February 15.
.04 Include a completed Form
4804, 4802, or computer-generated sub-
stitute. Clearly mark the ‘‘Test’’ box
on Form 4804 and media label Form
5064. On Form 4804 in the block
marked ‘‘Combined total number of
Payee records reported’’ provide the
total number of recipient ‘‘Q’’ records.
.05If a test file is submitted
electronically, the filer will be
prompted for what type of file is being
transmitted. Choose the option T = Test
File. Once the file has been transmit-
ted, complete Form 4804/4802 indicat-
ing TEST File in Box 1 and send to
IRS/MCC the same day. No processing
will begin until this form is received by
IRS/MCC. For additional information
on electronic filing, seePart C. and
Part D.
.06IRS/MCC will send an ack-
nowledgment to indicate the test re-
sults. Unacceptable magnetic media
files, along with documentation identi-
fying the errors, will be returned to the
filer for replacement. Resubmission of
replacement magnetic media test files
must be postmarked no later than
February 15. Electronic filers will also
receive documentation identifying er-
rors. Electronically filed tests must be
resubmitted on or before February 15.
.07IRS/MCC does not return me-
dia once it has been successfully
processed.
SEC. 9. FILING OF FORM 1042–S
MAGNETICALLY/ELECTRONICALLY AND
RETENTION REQUIREMENTS
.01Form 4804, Transmittal of In-
formation Returns Reported Mag-
netically/Electronically, Form 4802,
Transmittal of Information Returns Re-
ported Magnetically/Electronically
(Continuation), or computer-generated
substitute, MUST accompany ALL mag-
netic media shipments. For electronic
transmissions, the Form 4804 (and
Form 4802, if applicable) must be sent
the same day as the electronic trans-
mission. Form 4802 is a continuation
of Form 4804 and should only be used
if the filer is reporting for multiple
withholding agents and has the au-
thority to sign the affidavit on Form
4804.Failure to sign the affi-
davit on Form 4804 may delay process-
ing or could result in the files being
returned unprocessed. Form 4802

is not a stand-alone form; it can only
accompany Form 4804.
.02IRS/MCC encourages the use
of computer-generated substitutes for
Form 4804/4802 (See Note). The sub-
stitutes must contain all information
requested on the original forms includ-

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ing the affidavit and signature line.
Photocopies are acceptable but an
original signature is required.
Note:Be sure, when using computer
generated forms, to clearly mark which
tax year is being reported. This will
eliminate a phone call from IRS/MCC
to question the tax year.
.03Current and prior year data
may be submitted in the same ship-
ment; however, each tax year must be
on separate media, and a separate
Form 4804 must be prepared to clearly
indicate each tax year.
.04Filers who have prepared their
information returns in advance of the
due date are encouraged to submit this
information to IRS/MCC no earlier
than January 1 of the year the return is
due.
.05Do not report duplicate infor-
mation. If a filer submits returns
magnetically/electronically, identical
paper documents must not be filed.
This may result in erroneous penalty
notices.
.06Although an authorized agent
may sign the affidavit, the withholding
agent is responsible for the accuracy of
the Form 4804, the returns filed, and
will be liable for penalties for failure to
comply with filing requirements.
.07An external label, Form 5064,
must be affixed to each tape, tape
cartridge, and diskette submitted. If
diskettes are used, and the operating
system is not MS/DOS compatible, the
operating system and hardware infor-
mation must be provided. Failure to
provide this information may result in
the media being returned to the filer.
The following information is needed
on the label:
( a ) T y p e o f f i l i n g (i . e .,
Original).
(b)The tax year of the data
(i . e .,1 9 9 5. )
(c)The transmitter’s name.
(d)The five digit Transmitter
C o n t r o l C o d e ( T C C )b e g i n n i n g
numbers ‘‘22’’.

(e)Operating system software
and hardware used to create the file
(i.e., IBM PC/AT-MS/DOS, Apple
M a c I n t o s h / M a c W r i t e V 2 . 2 ) .
(f)The total number of ‘‘Q’’
records in the file.
(g)ransmitter’s media num-
ber. The number assigned to the media
by the transmitter.
(h)The sequence of each tape
or diskette (i.e., 001 of 008, 002 of
008, .. . , 008 of 008).
Information provided on the Form
5064 will assist IRS/MCC in identify-
ing information that is reported and in
locating a specific file if it is necessary
to return the file to the transmitter.
.08On the outside of the shipping
container,affix or attach
Form 4801 or
a substitute for the form, which reads
‘‘DELIVER UNOPENED TO TAPE
LIBRARY—MAGNETIC MEDIA RE-
PORTING BOX of
.’’ If there is only one container,
mark the outside as Box 1 of 1. For
multiple containers, include the se-
quence (for example, Box 1 of 3, 2 of
3, 3 of 3).
.09When submitting files include
the following:
(a) A signed Form 4804;
(b)Form 4802, if applicable;
(c)Form 5064, Media Label
affixed to the magnetic media;
(d) and Form 4801, outside
label.
.10IRS/MCC will not pay for or
a c c e p t ‘ ‘ C a s h - o n - D e l i v e r y ’ ’ o r
‘‘Charge to IRS’’ shipments of tax
information that an individual or orga-
nization is legally required to submit.
.11In general, withholding agents
should retain a copy of the information
returns filed with IRS or have the
ability to reconstruct the data for at
least 3 years from the reporting due
d a t e .
SEC. 10. DUE DATES
.01The due dates for filing paper
returns with IRS also apply to magnetic
media or electronic filing. Filing of
Form 1042–S is on a calendar year
basis. Files must be submitted to IRS/
MCC postmarked no later than March
15.
.02Form 1042–S returns filed
magnetically must be submitted to IRS/
MCC postmarkedor, (if other than the
U.S. Postal Service) received no later

than March 15.When using delivery
service other than the U.S. Postal
Service the date of receipt will be the
date received at IRS/MCC.
.03Copies of Form 1042–S infor-
mation must also be furnished to the
recipient by March 15.
.04If the due date of March 15
falls on a Saturday, Sunday, or a legal
holiday, the return to IRS and the
statement to recipient is considered
timely if filed with IRS and furnished to
the recipient on the next business day.
.05Late filed media could result
in a penalty for failure to file correct
information returns by the due dates.
(For information on penalties, refer to
the Penalty Section of the 1995 Instruc-
tions for Form 1042–S).
SEC. 11. EXTENSIONS OF TIME TO
FILE
.01For Tax Year 1995 (returns
due to be filed in 1996), transmitters
requesting an extension of time to file
for more than 50 withholding agents
are required to file the extension
request on magnetic media or via IRP-
BBS or electronically.(See Part E.
MAGNETIC/ELECTRONIC SPECIFI-
CATIONS FOR EXTENSION OF
TIME.) Transmitters requesting an ex-
tension of time for 10 or more with-
holding agents are encouraged to file
the request magnetically or electroni-
cally. Acceptable types of media are
tape, tape cartridge, 5
1
⁄4- and 3
1
⁄2-inch
diskette.
.02If a Withholding Agent is re-
questing an extension of time to file
Form 1042–S, either on paper or
magnetically/electronically, they must
submit Form 8809, Request for Exten-
sion of Time to File Information Re-
turns (Rev. 3–95) to IRS/MCC by

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March 15. If approved, an extension
will be granted for 30 days. A FORM
2758 IS NO LONGER ACCEPTABLE TO
REQUEST AN EXTENSION OF TIME TO
FILE FORM 1042–S.
.03Failure to properly complete
and sign the Form 8809 may cause
delays in processing the request or
result in a denial. Please read and
follow the instructions on the back of
the Form 8809 carefully.
.04Withholding agents may re-
quest an extension of time to file for
30 days as soon as they are aware
that an extension is necessary, but, no
later than the due date of the return. It
will take a minimum of 30 days for
IRS/MCC to respond to an extension
request. Under certain circumstances a
request for an extension of time could
be denied. In such cases, the withhold-
ing agent receives a denial letter. When
this denial letter is received, the
withholding agent has 20 days to
provide additional or necessary infor-
mation and resubmit the extension
request to IRS/MCC.
.05If an additional extension of
time is needed, a second Form 8809
may be submitted before the end of the
initial extension. Line 7 on the form
should be checked to indicate that the
original extension has been received
and the additional extension is being
requested. A second 30-day extension
will be approved only in cases of
extreme hardship or catastrophic
event.
.06A filer may only request an
extension of time for the tax year of
the returns that are due to be filed with
IRS.
.07A magnetically filed request
for an extension of time should be
sent using the following addresses:
If by Postal Service:
IRS-Martinsburg Computing Center
ATTN: Extension of time
Coordinator
P. O. Box 879, MS-360
Kearneysville, WV 25430
If by truck or air freight:
IRS-Martinsburg Computing Center
ATTN: Extension of Time
Coordinator
Route 9 and Needy Road, MS-360
Martinsburg, WV 25401
.08Transmitters who submit re-
quest for multiple withholding agents
will receive one approval letter with an
attached list of withholding agents
covered under that approval.
.09If an extension of time to file
magnetically or electronically is
granted, do not include a copy of the
letter granting the extension with Form
4804 or computer-generated substitute
or to the processing site with the paper
Form 1042–S.
.10IRS/MCC will only grant an
extension of time to file paper or
magnetically/electronically filed Form
1042–S, Foreign Person’s U.S. Source
Income Subject to Withholding.
.11An approved extension of time
for magnetic and electronic filing does
not provide additional time for supply-
ing the statement to recipient. Requests
for an extension of time to provide the
recipient copy must be sent to the IRS/
MCC.
.12Request an extension of time
to furnish the statements to recipients
by submitting a letter to IRS/MCC
containing the following information:
(a)Withholding Agent’s Name
( b ) T I N
( c ) A d d r e s s
(d)Type of Return
(e)Specify that the extension
request is to provide statements to
recipients.
(f)Reason for Delay
(g) Signature of Withholding
Agent or Person Duly Authorized
Requests for an extension of time to
furnish the statements of Form 1042–S
are not automatically approved; how-
ever, if approved, generally an exten-
sion will allow a maximum of 15
additional days from the due date to
furnish the statements to the recipients.
If the request is denied, the statements
must be sent to the recipients timely.
The request must be postmarked by the
date on which the statements are due
to the recipients.
.13An approved extension grants
additional time to file the Form 1042–S
with IRS/MCC ONLY. This does not
include Form 1042 which is an actual
tax return. Any tax due must still be
paid timely.
.14To request an extension of
time to file Form 1042, submit Form
2758 with the IRS at the following
address:
Internal Revenue Service Center
Philadelphia, PA 19255
SEC. 12. PROCESSING OF FORM
1042–S MAGNETICALLY/
ELECTRONICALLY
.01All data received at IRS/MCC
for processing will be given the same
protection as individual income tax
returns (Form 1040). IRS/MCC will
process the data and determine if the
records are formatted and coded ac-
cording to this revenue procedure.
.02When the magnetic media is
returned to the transmitter for replace-
ment, a listing identifying the type of
errors and frequency of such errors will
be provided. It is the responsibility of
the transmitter to check the entire file
for similar errors. The transmitter must
correct the problems and submit a
replacement file to IRS/MCC.
.03Some conditions may not re-
quire corrective actions. For example,
certain recipients should have had tax
withheld at a particular rate, but the
withholding agent withheld at a dif-
ferent tax rate. The withholding agent
should verify that the tax rates in
question are in fact the rates at which
tax was withheld. A letter must accom-
pany the original and/or replacement
files stipulating that the amount with-
held is accurate.
.04The following definitions have
been provided to help distinguish be-
tween a correction and a replacement:
A correction is an information return
submitted by the transmitter to correct
an information return that was suc-
cessfully processed by IRS/MCC, but
contained erroneous information.
A replacement is media that IRS/
MCC has returned due to format or

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coding errors encountered during
processing.
Media returned should receive
prompt attention.After necessary
changes have been made, these files
are to be returned to IRS/MCC within
45 days from the date of notice or the
withholding agent may be subject to a
failure to file penalty. A penalty may
also be assessed if the media is
returned to the withholding agent more
than two times. A penalty for inten-
tional disregard of filing requirements
will be assessed if a replacement file is
not returned to IRS/MCC. (For penalty
information, refer to the Penalty sec-
tion of the 1995 Instructions for Form
1042–S.)
.05IRS/MCC will not return me-
dia after successful processing. There-
fore, if the transmitter wants proof that
IRS/MCC received a shipment, the
transmitter should select a service with
tracing capabilities or one that will
provide proof of delivery.
.06 IRS/MCC will work with
filers as much as possible to assist with
processing problems. If the filer is
contacted by IRS/MCC, please respond
promptly. IRS/MCC may have informa-
tion that the filer needs to correct their
file.
.07Do not use special shipping
containers for transmitting data to IRS/
MCC. Shipping containers will not be
returned.
SEC. 13. CORRECTED RETURNS
.01Form 1042–S is required to be
filed magnetically or electronically if
250 or more returns are filed. This
requirement applies separately to both
original and corrected returns.
.02If Form 1042–S is filed mag-
netically or electronically, and later the
filer determines that corrections are
necessary, the corrections may be filed
on paper if the 250 correction docu-
ment threshold has not been met.
.03If the withholding agent has
250 or more corrections, they MUST
be submitted to IRS/MCC magnetically
or electronically unless a waiver has
been granted. If a waiver was granted
for original Form 1042–S, this waiver
applies to the corrections as well.
.04Corrected returns MUST NOT
be included on the same media or sent
in the same electronic transmission
with original returns.
.05Form 4804 and Form 4802
must be submitted with corrected
magnetically/electronically submitted
files.
.06The record sequence for filing
corrections is the same as for original
returns.
.07Review the chart that follows.
E a c h c o r r e c t i o n r e q u i r e s T W O
TRANSACTIONS.
Guidelines for Filing Corrected Re-
turns Magnetically/Electronically
TRANSACTION 1: Identify incorrect
r e t u r n s
a.Prepare a new Form 4804/4802
that includes information related to
this file.
b.Mark ‘‘Correction’’ in Block 1 of
Form 4804.
c.Prepare a new file. Make a
separate ‘‘T’’ Record. The information
in the ‘‘T’’ Record will be exactly the
same as it was in the original
submission.
d.The Recipient ‘‘Q’’ Record must
contain exactly the same information
as submitted previously except insert a
‘‘V’’ in field position 371, Corrected
Return Indicator.
e.Prepare a ‘‘W’’ Record.
TRANSACTION 2: Report the correct
information
a.Prepare a new file with the
correct information in all records.
b.Make a separate ‘‘T’’ Record for
each transmitter.
c.The ‘‘Q’’ Record must show the
correct information as well as a ‘‘C’’
in field position 371, Corrected Return
Indicator.
d. Prepare a ‘‘W’’ Record.
e.‘‘V’’ and ‘‘C’’ Coded Corrected
returns submitted to IRS/MCC may be
on the same tape or diskette, but must
have separate ‘‘T’’ Records.
f. Check the ‘‘Correction Box’’ on
the Form 5064.
.08See the 1995 ‘‘Instructions for
Form 1042–S’’ for information on
filing paper corrections.
SEC. 14. EFFECT ON PAPER
DOCUMENTS
.01Magnetic or electronic report-
ing eliminates the need to submit paper
Form 1042–S to IRS.
.02Even though the threshold for
filing Form 1042–S magnetically or
electronically is 250 or more, IRS
encourages transmitters to submit all
returns magnetically or electronically.
.03The address for filing paper
Form 1042–S and Form 1042 is:
Internal Revenue Service Center
Philadelphia, PA 19255
Do NOT send paper Form 1042–S or
Form 1042 to IRS/MCC.
.04If the returns were filed mag-
netically or electronically with IRS/
MCC, do not send paper returns to
Philadelphia. Duplicate filing may
cause penalty notices to be generated.

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SEC. 15. DEFINITION OF TERMS
ElementDescription
Asynchronous ProtocolsThe type of data transmission most often used by micro-computers, PCs and
s o m e m i n i - c o m p u t e r s .
A s y n c h r o n o u s t r a n s m i s s i o n s t r a n s f e r
data at arbitrary time intervals using start-stop method. Each
character transmitted has its own start bit and stop bit.
bDenotes a blank position. Enter blank(s) when this symbol is used (do not
enter the letter ‘‘b’’). This appears in numerous areas throughout the record
descriptions.
Bisynchronous Protocols
For purposes of this publication, these are electronic trans-
missions made using IBM 3780 protocols. These transmissions
must be in EBCDIC character code and use the Bell 208B
(4800bps) or AT&T 2296A (9600bps) modems. Standard IBM
3 7 8 0 s p a c e c o m p r e s s i o n i s a c c e p t a b l e .
Blocked recordsTwo or more records grouped together between interrecord gaps.
Correction
Media submitted by the payer to correct records that were suc-
c e s s f u l l y p r o c e s s e d b y I R S / M C C , b u t c o n t a i n e d e r r o n e o u s
i n f o r m a t i o n .
Employer Identification Number (EIN)A nine-digit number assigned by IRS to a person for Federal tax reporting
purposes.
Electronic FilingSubmission of information returns using switched telecommunications
network circuits. These transmissions use modems, dial-up phone lines,
asynchronous or bisynchronous protocols (see Part C and D of this
publication for specific information on electronic filing).
FileFor the purpose of this revenue procedure, a file consists of all records
submitted by a transmitter either magnetically or electronically.
Filer
Person or organization who prepares and submits files. May be the
w i t h h o l d i n g a g e n t a n d / o r t r a n s m i t t e r .
Information Reporting Program Bulletin
Board System (IRP–BBS)
An electronic bulletin board provides the ability to transmit information
returns via a personal computer (PC) using dial-up modems; provides
immediate access to the latest changes, updates, and publications.
IRS/MCCInternal Revenue Service/Martinsburg Computing Center
Magnetic MediaRefers to
1
⁄2-inch magnetic tape,tape cartridge, 5
1
⁄4- or 3
1
⁄2-inch diskettes.
Multi-reel/diskette fileA group of tapes or diskettes submitted under one TCC where all media
either ends with a Recipient ‘‘Q’’ Record or Withholding Agent ‘‘W’’
Record, EXCEPT for the last media of the file, which ends with an End of
Transmission ‘‘Y’’ Record. (Refer to Part B. Sec. 5 for data sequence)
PayerPerson or organization who is the originator of income and enters into a
contractual agreement with the withholding agent for the purpose of
disbursing income for the payer. For example, Corporation X is about to
declare a dividend. Corporation X contracts Bank Y to calculate and
distribute such dividends to recipients, and be responsible for withholding.
Corporation X is considered the Payer and Bank Y is considered the
Withholding Agent.
RecipientPerson or organization receiving payments from a withholding agent.
Replacement
Media that IRS/MCC has returned due to format errors encountered during
processing.
Service Bureau
Person or organization with whom the payer has a contract to prepare and/
or submit information return file to IRS/MCC. a parent company
submitting data for a subsidiary is not considered a service bureau.

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ElementDescription
Social Security Number (SSN)A nine-digit number assigned by the Social Security Administration (SSA)
to an individual for tax and wage reporting purposes.
Special CharacterAny character that is not a numeral, an alpha, or a blank.
Taxpayer Identification Number (TIN)May be either a Social Security Number (SSN) or an Employer
Identification Number (EIN).
TransmitterPerson or organization who prepares and submits files. May be the
withholding agent or their agent.
Transmitter Control Code (TCC)A five-digit code assigned prior to filing. This number is inserted in the
‘‘T’’ Record and must be present. A Form 4419 must be filed with IRS/
MCC to receive this number.Transmitter control codes assigned to 1042–S
filers will always begin with ‘‘22’’.
Withholding AgentA person or entity, U.S. or foreign, required to withhold U.S. tax on
payments of income subject to withholding from U.S. sources. A
withholding agent may be an individual, partnership, corporation, trust,
estate, government agency (Federal, State or local), association, or a tax-
exempt foundation or organization. The withholding agent is responsible for
the completeness, accuracy, and timely submission of files.
SEC. 16. MAJOR PROBLEMS ENCOUNTERED
PLEASE READ THE FOLLOWING LIST OF MAJOR PROBLEMS ENCOUNTERED. BEFORE SUBMITTING FILES,
REVIEW THE CONTENT AND FORMAT CAREFULLY TO ENSURE THE SPECIFICATIONS IN THIS PUBLICATION
HAVE BEEN CORRECTLY FOLLOWED. CHECK TO BE SURE THE CONTENT OF EACH TYPE OF RECORD IS
ACCURATE. THIS MAY ELIMINATE THE NEED FOR IRS/MCC TO RETURN THE FILE FOR REPLACEMENT, AND
THEREFORE REDUCE THE LIKELIHOOD OF A PENALTY ASSESSMENT FOR INCORRECT SUBMISSIONS. If due
to unavoidable circumstances the data would be unacceptable to IRS/MCC, (e.g., math or tax rate errors), include a letter of
explanation with each submission.
Listed below are some of the most common problems:
1.Records formatted incorrectly.
Failure to format records correctly will result in files being returned for replacement.
2.Incorrect or missing Transmitter Control Code.
Filers MUST use the unique Transmitter Control Code (TCC) assigned for Form 1042–S reporting(Beginning numbers
‘‘22’’). Application procedures are provided in Part A. Sec. 7 of this revenue procedure.
3.Missing Form 4804
Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, must accompany each magnetic media
shipment or electronic transmission. Forms 1042–S filed magnetically or electronically are not considered complete until a
signed Form 4804 is received by IRS/MCC.
4.Incorrect format of the Recipient Name Line.
The recipient’s surname should be reported first, followed by given names.However, if the recipient’s surname is not
entered in position 139, the filer MUST enter an asterisk that immediately precedes the recipient’s surname. If the surname
is reported first, the asterisk MUST be omitted, since an asterisk is not valid in the first position of Recipient Name Line
One.
5.Incorrect record sequence.
To be acceptable, records must be in a specific sequence. If this sequence is not followed, the file will be returned for
replacement. (Refer to Part B. Sec. 5)

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6.Incorrect block size.

Some of the files received at IRS/MCC are blocked incorrectly causing media to be returned. Refer to Part B. Magnetic
Media Specifications, Sec. 2. Tape Specifications for the correct block size for submitting Form 1042–S magnetically. A
block may not exceed 15,000 characters, although, shorter blocks may be used.
7.Incorrect Country Code in positions 137–138 of the Recipient ‘‘Q’’ Record and rate of tax withheld.
If the letters OC (which should be used ONLY when absolutely necessary) are used, the rate of tax withheld MUST be the
maximum applicable rate.

8.Incorrect Country Name in positions 335–354 of the Recipient ‘‘Q’’ Record.
This is a Required field; please read the Description and Remarks portion carefully. This may or may not be the same
country as indicated in Country Code, field position 137–138. Do not use Other Country; USA; US; outside of USA; United
States.
9.Incorrect Tax Rate, Field position 372–373 of the Recipient ‘‘Q’’ Record.
This is a Required field with very specific acceptable codes. Please ensure the accuracy of the correct tax rate depending on
the proper country code and/or exemption code.

10.Incorrect Exemption Code in field position 370.
This is a Required field which causes many processing errors. Please read carefully the description and remarks portion,
along with the note at the bottom to eliminate the possibility of errors.
11.Incorrect Recipient Address Fields.
Be sure to use specific breakdown of the address in the following positions:
244—283 Street Address
333—334 U.S. State Code
284—308 City335—354 Country Name
309—323 Province Name
324—332 Postal Code
PART B. MAGNETIC MEDIA SPECIFICATIONS
SEC. 1. GENERAL
.01These specifications prescribe the required format and content of the records to be included in the
magnetic media
file. Usually, IRS/MCC will be able to process any compatible file. Deviations cannot and will not be

permitted in any of the data fields.
.03Regardless of the type of media used or if returns are filed electronically, the record length must be 500 positions.
SEC. 2. TAPE SPECIFICATIONS
.01In most instances, IRS/MCC can process any compatible magnetic tape fileif the following specifications are met:
(a)9-track EBCDIC (Extended Binary Coded Decimal Interchange Code) with:
(1)Odd parity
(2)Recording density—1600 or 6250CPI
(b)9-track ASCII (American Standard Coded Information Interchange) with:
(1)Odd Parity
(2)Recording density—1600 or 6250CPI
(3)If using UNISYS Series 1100/2200, an Interchange tape with ASCII Recording mode should be used.

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(4)If both ASCII and EBCDIC recording is available, ASCII should be used.
.02 Allcompatible tape files must have the following characteristics: Typeof tape—
1
⁄2-inch (12.7 mm) wide, computer-
grade magnetic tape on reels of up to 2,400 feet 731.52 m) within the following specifications:
(a)Tape thickness: 1.0 or 1.5 mils, and
(b)Reel diameter: 10
1
⁄2-inch (26.67 cm), 8
1
⁄2-inch (21.59 cm), 7-inch (17.78 cm), or 6-inch.
.03The tape records may be blocked subject to the following:
(a)A block may not exceed 15,000 tape positions.
(b)If the use of blocked records would result in a short block, all remaining positions of the block must be filled
with 9’s; however, the last block of the file may be filled with 9’s or truncated. Do not pad a block with blanks.
(c)All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any
control fields or block descriptor fields which describe the length of the block or the logical records within the block. The
number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last
block which may be shorter (see item b above). The block length must be evenly divisible by 500.
(d)Records may not span blocks.
.04Labeled or unlabeled tapes may be submitted.
.05Tape header and trailer labels, record marks, and tape marks are all optional. If used, they must conform to the
following standards:
(a)Header labels must begin with VOL1, VOL2, HDR1, HDR2, or 1HDR. They must be the first record(s) on the
reel immediately before the Transmitter ‘‘T’’ Record. Header labels may not exceed 80 characters in length.
(b)Trailer labels must begin 1EOR, 1EOF, EOF1, or EOR1. They must be the last record(s) on the reel, after the
‘‘Y’’ record and tape mark (if a tape mark is used). Trailer labels may not exceed 80 characters in length.
(c)Tape marks must be IBM 001111 (Octal 17) in even parity. They always appear immediately after the ‘‘Y’’
record. If both header and trailer labels are used, the tape mark must follow the header label and must precede and/or follow
the trailer label(s).
SEC. 3. TAPE CARTRIDGE SPECIFICATIONS
.01In most instances, IRS/MCC can process tape cartridges that meet the following specifications:
(a)Must be IBM 3480, 3490 or AS400 compatible.
(b)Must meet American National Standard Institute (ANSI) standards, and have the following characteristics:
(1)Tape cartridges will be
1
⁄2-inch tape contained in plastic cartridges which are approximately 4-inches by
5-inches by 1-inch in dimension.
(2)Magnetic tape will be chromium dioxide particle based
1
⁄2-inch tape.
(3)Tape Cartridges must be 18-track or 36-track parallel. (See Note.)
(4)Tape Cartridges will contain 37,871 CPI or 75,742 CPI (characters per inch).
(5)Mode will be full function.
(6)The data may be compressed using EDRC (Memorex) or IDRC (IBM) compression.
(7)Either EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded
Information Interchange) may be used, but we highly encourage ASCII.
.02 The tape cartridge records defined in this revenue procedure may be blocked subject to the following:
(a)A block must not exceed 15,000 tape positions.
(b)If the use of blocked records would result in a short block, all remaining positions of the block must be filled
with 9’s; however, the last block of the file may be filled with 9’s or truncated. Do not pad a block with blanks.
(c)All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any
control fields or block descriptor fields which describe the length of the block or the logical records within the block. The
number of logical records within a block (the blocking factor) must be constant in every block with the exception of the
last block which may be shorter (see item b above). The block length must be evenly divisible by 500.

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(d)Records may not span blocks.
.03Tape cartridges may be labeled or unlabeled.
.04For the purposes of this revenue procedure, the following must be used:
Tape Mark:

(a)Used to signify the physical end of the recording on tape.
(b)For even parity, use BCD configuration 001111 (8421).
(c)May follow the header label and precede and/or follow the trailer label.
Note: Filers should indicate on the Form 5064 Label and transmittal Form 4804 whether the cartridge is 18- or 36-track,
and if cartridges are ASCII or EBDIC format.
SEC. 4. 5
1
⁄4-INCH AND 3
1
⁄2-INCH DISKETTE SPECIFICATIONS
(a) 5
1
⁄4- or 3
1
⁄2-inches in diameter.
(b)Data must be recorded in standard ASCII code.For 5
1
⁄4-inch diskettes, data may be recorded using EBCDIC if
the diskette is created on an IBM System 36.
(c)Records must be a fixed length of 500 bytes per record.
(d)Delimiter character commas (,) must not be used.
(e)Positions 499 and 500 of each recordmust contain carriage return/line feed (cr/lf) charactersif applicable.

(f)Filename of 1042TAX must be used. Do not enter any other data in this field. If a file will consist of more than
one diskette, the filename 1042TAX will contain a 3 digit extension. This extension will indicate the sequence of the
diskettes within the file. For example, the first diskette will be named 1042TAX.001, the second diskette will be
1042TAX.002, etc.
(g)A diskette file may consist of multiple diskettes as long as the filename conventions are followed.
(h)Diskettes must meet one of the following specifications:
CapacityTracksSides/DensitySector Size
1.44 mb96tpihd512
1.44 mb135tpihd512
1.2 mb96tpihd512
720 kb48tpids/dd512
360 kb48tpids/dd512
320 kb48tpids/dd512
180 kb48tpiss/dd512
160 kb48tpiss/dd512
.02IRS/MCC encourages transmitters to use blank or currently formatted diskettes when preparing files. If extraneous
data follows the end of ‘‘Y’’ record, the file must be returned for replacement.
.03IRS/MCC prefers that 5
1
⁄4- and 3
1
⁄2-inch diskettes be created using MS/DOS; however, diskettes created using other
operating systems may be acceptable. Although, 3
1
⁄2-inch diskettes created on a System 36 or AS400 ARE NOT
ACCEPTABLE. IRS/MCC has equipment that can convert diskettes created under virtually any operating system to the
appropriate MS/DOS format. IRS/MCC strongly recommends that transmitters submit a test file for 5
1
⁄4- and 3
1
⁄2-inch
diskettes, especially if their data was not created using MS/DOS.
.04Transmitters are encouraged to use high density diskettes. Low density diskettes are acceptable but must be
formatted in low density.
SEC. 5. DATA SEQUENCE SPECIFICATIONS
.01The first position of each record indicates the record type:

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TransmitterT
RecipientQ
Withholding AgentW
End of TransmissionY
.02In order to be acceptable, records within the file must be in the following sequence:
(a)Single tape, cartridge, or diskette:
(1)A Transmitter ‘‘T’’ Record; then
(2)One or more Recipient ‘‘Q’’ Records followed by a corresponding Withholding Agent ‘‘W’’ Record then;
(3)Additional ‘‘Q’’ and ‘‘W’’ Record sequences for other withholding agents as needed; then
(4)An End of Transmission ‘‘Y’’ Record.
(b)Multiple tapes and cartridges: (see NOTE)
(1)A Transmitter ‘‘T’’ Record at the beginning of each tape and cartridge; then
(2)Sequence of Recipient ‘‘Q’’ Records followed by corresponding Withholding Agent ‘‘W’’ Records; then
(3)A sequence of Recipient ‘‘Q’’ Records may be continued from one tape to the next if they apply to the same
withholding agent, without the necessity of repeating the ‘‘W’’ Record. The sequence might be, for example, QQQQ (end of
one tape); TQQQQW (beginning of next tape); then
(4)An End of Transmission ‘‘Y’’ Record ending the last tape.
(c)Multiple diskettes: (see NOTE)
(1)A Transmitter ‘‘T’’ Record; then
(2)One or more Recipient ‘‘Q’’ Records followed by a corresponding Withholding Agent ‘‘W’’ Record; then
(3)Additional ‘‘Q’’ and ‘‘W’’ Record sequences for other withholding agents as needed; then
(4)A sequence of Recipient ‘‘Q’’ Records may be continued from one diskette to the next if they apply to the
same withholding agent, without the necessity of repeating the ‘‘W’’ Record. The sequence might be, for example, QQQQ
(end of one diskette); QQQQW (beginning of next diskette); then
(5)An End of Transmission ‘‘Y’’ Record ending the last diskette.
.03The minimum file transmitted must consist of a Transmitter ‘‘T’’ Record, a Recipient ‘‘Q’’ Record, and
Withholding Agent ‘‘W’’ Record, and an End of Transmission ‘‘Y’’ Record.
NOTE:Due to differences in the processing of 1042-S information filed on tapes, tape cartridges, and diskettes, it is
required that there be a ‘‘T’’ record at the beginning of each tape or cartridge, but not at the beginning of each diskette in
a shipment.
SEC. 6. THE TRANSMITTER ‘‘T’’ RECORD
.01This record identifies the entity preparing and transmitting the file. The transmitter and the withholding agent may
be the same, but they need not be. The first record of a file MUST be a Transmitter ‘‘T’’ record, (preceded only by header
labels, if any), and must appear on each tape andcartridge
, otherwise the file will be returned for replacement. FOR TAPE
ANDCARTRIDGE FILES ONLY, the Sequence Number, position 4–5 of the ‘‘T’’ record must be increased by 1 (one)
for each tape and cartridge. The ‘‘T’’ Record is a fixed length of 500 positions.
.02If the field is not applicable, allow for the field by entering blanks or zeros as instructed.
RECORD NAME: TRANSMITTER ‘‘T’’ RECORD
PositionField TitleLengthDescription and Remarks
1Record Type1REQUIRED. Enter ‘‘T.’’
2–3Tax Year2REQUIRED. Enter year for which income and withholding are being
reported (for example, enter ‘‘95’’ for income and withholding reported for
1995) (unless reporting for a different tax year).
4–5Sequence Number2The two-digit sequence assigned by the transmitter to this media, starting with
01. If Header Labels are used, the sequence should be the same as the
Sequence Number.This field is required for tape and cartridge only.
6–14Transmitter’s
Taxpayer
Identification
Number (TIN)
9REQUIRED. Enter the Identification Number (Social Security Number (SSN)
or Employer Identification Number (EIN)) of the Transmitter. Do NOT enter
blanks, hyphens, or alpha characters. A TIN consisting of all the same digits
(e.g., 111111111) is not acceptable.

SEQ 0055 JOB L47-013-012 PAGE-0033 PT 3 PGS 33-
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RECORD NAME: TRANSMITTER ‘‘T’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
15–54Transmitter Name40REQUIRED. Enter name of transmitter of file. Abbreviate if necessary to fit 40-
character limit. Omit punctuation if possible. Left-justify and blank fill.
55–94Transmitter
Address
40REQUIRED. Enter mailing address of the transmitter. Street address should
include number, street, apartment or suite number (or P.O. Box if mail is not
delivered to street address). Abbreviate as needed to fit 40-character limit.
Omit punctuation if possible. Left-justify and blank fill.
95–114City20REQUIRED. Enter the city or town of transmitter. If applicable enter APO or
FPO only. Left-justify and blank fill.
115–116State Code2REQUIRED. Enter two-letter Post Office Code as shown in the list below
ONLY. Do NOT spell out the state name.
StateCodeStateCodeStateCode
AlabamaALMarylandMDSouth CarolinaSC
AlaskaAKMassachusettsMASouth DakotaSD
ArizonaAZMichiganMITennesseeTN
ArkansasARMinnesotaMNTexasTX
CaliforniaCAMississippiMSUtahUT
ColoradoCOMissouriMOVermontVT
ConnecticutCTMontanaMTVirginiaVA
DelawareDENebraskaNEWashingtonWA
District of ColumbiaDCNevadaNVWest VirginiaWV
FloridaFLNew HampshireNHWisconsinWI
GeorgiaGANew JerseyNJWyomingWY
HawaiiHINew MexicoNMAmerican SamoaAS
IdahoIDNew YorkNYFederated States
IllinoisILNorth CarolinaNCof MicronesiaFM
IndianaINNorth DakotaNDGuamGU
IowaIAOhioOHNorthern Mariana IslandsMP
KansasKSOklahomaOKMarshall IslandsMH
KentuckyKYOregonORPalauPW
LouisianaLAPennsylvaniaPAPuerto RicoPR
MaineMERhode IslandRIVirgin IslandsVI
NOTE:When reporting APO/FPO addresses use the following format:
Example:
NamePVT Willard J. Doe
Street AddressCompany F, PSC Box 100
*CityAPO (or FPO)
StateAE, AA, or AP
ZIP Code098010100
*AE is the designation for ZIPs beginning with 090-098, AA for ZIP 340, and AP for ZIPs 962-966.
117–125ZIP Code9REQUIRED. Enter the ZIP code of the transmitter for all U.S. addresses, U.S.
Territories or Possessions, APO/FPO addresses. For transmitters using a five-
digit ZIP code, enter the ZIP code in the left-most five positions and zero fill
the remaining four positions. For transmitters outside the U.S., enter nine
zeros only. Do NOT blank fill.
126–130Transmitter
Control Code
(TCC)
5REQUIRED. Enter your five-digit Transmitter Control Code. This MUST be the
TCC assigned for Form 1042–S reporting ONLY.(Beginning with numbers
‘‘22’’.)
131–498Reserved368Blank fill.

SEQ 0056 JOB L47-013-012 PAGE-0034 PT 3 PGS 33-
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RECORD NAME: TRANSMITTER ‘‘T’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
499–500Blank or Carriage
Return Line Feed
2Enter blanks or carriage return line feed (CR/LF)
TRANSMITTER ‘‘T’’ RECORD LAYOUT
Record
Type
Tax
Year
Sequence
Number
Transmitter
TIN
Transmitter
Name
Transmitter
Address
12–34–56–1415–5455–94
CityState CodeZIP CodeTCCReserved
Blank or
CR/LF
95–114115–116117–125126–130131–498499–500
SEC. 7. RECIPIENT ‘‘Q’’ RECORD
.01The ‘‘Q’’ Record contains complete name and address information for both Withholding Agent and Recipient of
Income, together with all the particulars of the income paid and tax withheld. Complete Withholding Agent data is required
because each Recipient ‘‘Q’’ Record is treated as if it were a separate Form 1042–S, and is processed independently of other
records.
.02Since the ‘‘Q’’ Record is restricted to one type of income, and one tax rate, under certain circumstances it would be
necessary to write more than one ‘‘Q’’ Record. Following are some of the circumstances when more than one ‘‘Q’’ record
for a payee would be required:
(a)Different sources of income. For example, Recipient X derived income from Capital Gains (Income Code 09) and
Industrial Royalties (Income Code 10). A separate ‘‘Q’’ record must be reported for each income code; providing Gross
Income Paid and U.S. Federal Tax Withheld pertaining to the corresponding code.
(b)Change in Country Code during the year. For example, the withholding agent received notification via Form 1001 that
the recipient changed from country X to country Y. A separate ‘‘Q’’ record must be reported for each country code;
providing Gross Income Paid, Tax Rate and U.S. Federal Tax Withheld. The amounts reported must be based on each
country code and the period of time under that country code.
(c)Change in a country’s tax treaty rate during the year. For example, effective April 1, country X changes its tax treaty
rate from 10% to 20%. A separate ‘‘Q’’ record must be reported for each of the tax rates. Provide the Gross Income Paid,
Tax Rate, and U.S. Federal Tax Withheld for the period of time under that tax rate.
(d)Gross Income Paid of more than one billion dollars. Report a Gross Income Paid of 99999999999 (dollars and cents)
in the first Recipient ‘‘Q’’ record. The second Recipient ‘‘Q’’ record will contain the remaining money amount.
.03Failure to provide multiple recipient ‘‘Q’’ records when necessary will generate math computation errors during
processing and therefore, result in the file being returned for replacement.
.04All recipient ‘‘Q’’ Records for a particular Withholding Agent must be written before the corresponding Withholding
Agent ‘‘W’’ Record, and before ‘‘Q’’ Records for another Withholding Agent may begin.
.05If the field is not applicable, allow for the field by entering blanks or zeros as instructed.
RECORD NAME: RECIPIENT ‘‘Q’’ RECORD
PositionField TitleLengthDescription and Remarks
1Record Type1REQUIRED. Enter ‘‘Q’’.
2–10Withholding
Agent’s Taxpayer
Identification
Number (TIN)
9REQUIRED. Enter the nine-digit Taxpayer Identification Number of the
Withholding Agent. Do NOT enter blanks, hyphens, or alpha characters. A
TIN consisting of all the same digit (e.g., 111111111) is not acceptable. Do
NOT enter the recipient’s TIN in this field.
11–45Agent’s Name35REQUIRED. Enter the name of the Withholding Agent. Abbreviate as needed.
Left-justify and blank fill.

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RECORD NAME: RECIPIENT ‘‘Q’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
46–80Agent’s Address35REQUIRED. Enter mailing address of the withholding agent. Street address
should include number, street, apartment or suite number (or P.O. Box if mail
is not delivered to street address). Abbreviate as needed. Left-justify and
blank fill.
81–100Agent’s City20
REQUIRED. Enter the city or town (or other locality name). Enter APO or FPO
only, if applicable. Left-justify and blank fill.
101–102Agent’s State
Code
2REQUIRED. Enter the two-character state abbreviation from the list in Part B.
Sec. 6, Field Positions 115–116 of ‘‘T’’ Record. If not a U.S. state, territory,
or APO/FPO identifier, blank fill this field. Do not use any of the two
character Country Codes in the State Code field.
103–111Agent’s ZIP Code9
REQUIRED. Enter nine numeric characters for all U.S. addresses (including
territories and possessions). If a five-digit ZIP code is used, enter the ZIP
code in the left-most five positions and zero fill the remaining four positions.
Zero fill for addresses outside the U.S.
112Type of TIN1This field is used to identify the Taxpayer Identification Number (TIN) in
positions 113–121 as either an Employee Identification Number (EIN), Social
Security Number (SSN), or indicate that the type is undeterminable. Enter the
appropriate code from the following table:
Type of TINTIN
1Employer Identification Number (EIN)
2Social Security Number (SSN)
BlankEnter a blank if type of TIN is undeterminable
113–121Recipient’s U.S.
Taxpayer
Identification
Number (TIN)
9Enter the Recipient’s nine-digit Taxpayer Identification Number (TIN). Do
NOT enter hyphens or alpha characters. Entry of all zeroes, all ones, twos,
etc. will have the effect of an incorrect TIN. Use the following instructions for
Entries in Positions 113–121:
1. A TIN MUST be entered when Exemption Code ‘‘1’’ is entered in Position
370 of the Recipient ‘‘Q’’ Record.
2. A TIN MUST be entered when Income Code ‘‘16’’ is entered in Positions
355–356 of the Recipient ‘‘Q’’ Record.
3. If the conditions in 1 and 2 are not present, and if a TIN is not available,
enter blanks in Positions 113–121 of the Recipient’s ‘‘Q’’ Record.* Do NOT
enter the Withholding Agent’s TIN in this field.
*NOTE: When the submission includes records in which blanks are entered in Positions 113–121, provide a letter
identifying the number of Recipient ‘‘Q’’ Records affected and presenting the reason(s) that TIN(s) are not provided. A
corrected ‘‘Q’’ record is required to be submitted upon later receipt of the Recipient TIN.
122–136Account Number15Enter the account number assigned by the withholding agent to the recipient.
This number is used to identify a specific account. This field will be all
blanks if account numbers are NOT assigned. This field may contain numeric
or alphabetic characters, blanks or hyphens. Left-justify and blank fill.
137–138Country Code(Do
not enter ‘‘U.S.’’
in this field)
2REQUIRED. This field is used to identify the country for which the tax treaty
benefits are based. The rate of tax withheld is determined by this code. Enter
the appropriate code exactly as it appears in the following table. THIS MAY
OR MAY NOT BE THE SAME AS THE COUNTRY ENTERED IN THE COUNTRY
NAME FIELD (POSITIONS 335-354 OF THE RECIPIENT ‘‘Q’’ RECORD.)Enter
OC, Other Countries, only when the country of residence can-
not be determined. If the recipient’s country of residence cannot
be determined, you must withhold at the maximum applicable
tax rate.

SEQ 0058 JOB L47-014-009 PAGE-0036 PT 3 PGS 36-
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COUNTRY CODES
CountryCode
AfghanistanAF
AlbaniaAL
AlgeriaAG
American SamoaAQ
AndorraAN
AngolaAO
AnguillaAV
AntarcticaAY
Antigua and BarbudaAC
ArgentinaAR
ArmeniaAM
ArubaAA
Ashmore and Cartier IslandsAT
AustraliaAS
AustriaAU
AzerbaijanAJ
AzoresPO
Bahamas, TheBF
BahrainBA
Baker IslandFQ
BangladeshBG
BarbadosBB
Bassas da IndiaBS
BelarusBO
BelgiumBE
BelizeBH
BeninBN
BermudaBD
BhutanBT
BoliviaBL
Bosnia-HerzegovinaBK
BotswanaBC
Bouvet IslandBV
BrazilBR
British Indian
Ocean TerritoryIO
BruneiBX
BulgariaBU
Burkina FasoUV
BurmaBM
BurundiBY
CambodiaCB
CameroonCM
CanadaCA
Canary IslandsSP
Cape VerdeCV
Cayman IslandsCJ
Central African RepublicCT
ChadCD
ChileCI
China, People’s Republic ofCH
Christmas Island (Indian Ocean)KT
Christmas Island (Pacific Ocean)KR
Clipperton IslandIP
Cocos (Keeling) IslandsCK
ColombiaCO
ComorosCN
CongoCF
Cook IslandsCW
Coral Sea Islands TerritoryCR
CountryCode
Costa RicaCS
Cote D’lvoire (Ivory Coast)IV
CroatiaHR
CubaCU
CyprusCY
Czech RepublicEZ
DenmarkDA
DjiboutiDJ
DominicaDO
Dominican RepublicDR
EcuadorEC
EgyptEG
El SalvadorES
Equatorial GuineaEK
EritreaER
EstoniaEN
EthiopiaET
Europa IslandEU
Falkland Islands (Islas Malvinas)FK
Faroe IslandsFO
FijiFJ
FinlandFI
FranceFR
French GuianaFG
French PolynesiaFP
French Southern and Antarctic LandsFS
GabonGB
Gambia, TheGA
Gaza StripGZ
GermanyGM
GeorgiaGG
GhanaGH
GibraltarGI
Glorioso IslandsGO
GreeceGR
GreenlandGL
GrenadaGJ
GuadeloupeGP
GuamGQ
GuatemalaGT
GuernseyGK
GuineaGV
Guinea-BissauPU
GuyanaGY
HaitiHA
Heard Island and McDonald IslandsHM
HondurasHO
Hong KongHK
Howland IslandHQ
HungaryHU
IcelandIC
IndiaIN
IndonesiaID
IranIR
IraqIZ
Iraq-Saudi Arabia Neutral ZoneIY
IrelandEI
Isle of ManIM

SEQ 0059 JOB L47-014-009 PAGE-0037 PT 3 PGS 36-
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CountryCode
IsraelIS
ItalyIT
JamaicaJM
Jan MayenJN
JapanJA
JerseyJE
Johnston AtollJQ
JordanJO
Juan de Nova IslandJU
KazakhstanKZ
KenyaKE
Kingman ReefKQ
KiribatiKR
Korea, Democratic People’s
Republic of (North)KN
Korea, Republic of (South)KS
KuwaitKU
KyrgyzstanKG
LaosLA
LatviaLG
LebanonLE
LesothoLT
LiberiaLI
LibyaLY
LiechtensteinLS
LithuaniaLH
LuxembourgLU
MacauMC
MacedoniaMK
MadagascarMA
MalawiMI
MalaysiaMY
MaldivesMV
MaliML
MaltaMT
Marshall IslandsRM
MartiniqueMB
MauritaniaMR
MauritiusMP
MayotteMF
MexicoMX
Micronesia, Federated States ofFM
Midway IslandsMQ
MoldovaMD
MonacoMN
MongoliaMG
MontenegroMW
MontserratMH
MoroccoMO
MozambiqueMZ
NamibiaWA
NauruNR
Navassa IslandBQ
NepalNP
NetherlandsNL
Netherlands AntillesNT
New CaledoniaNC
New ZealandNZ
NicaraguaNU
NigerNG
NigeriaNI
CountryCode
NiueNE
Norfolk IslandNF
Northern IrelandUK
Northern Mariana IslandsCQ
NorwayNO
OmanMU
PakistanPK
Palmyra AtollLQ
PanamaPM
Papua New GuineaPP
Paracel IslandsPF
ParaguayPA
PeruPE
PhilippinesRP
Pitcairn IslandsPC
PolandPL
PortugalPO
Puerto RicoRQ
QatarQA
ReunionRE
RomaniaRO
RussiaRS
RwandaRW
St. Kitts and NevisSC
St. HelenaSH
St. LuciaST
St. Pierre and MiquelonSB
St. Vincent and the GrenadinesVC
San MarinoSM
Sao Tome and PrincipeTP
Saudi ArabiaSA
SenegalSG
SerbiaSR
SeychellesSE
Sierra LeoneSL
SingaporeSN
SlovakiaLO
SloveniaSI
Solomon IslandsBP
SomaliaSO
South AfricaSF
South Georgia and the
South Sandwich IslandsSX
SpainSP
Spratly IslandsPG
Sri LankaCE
SudanSU
SurinameNS
SvalbardSV
SwazilandWZ
SwedenSW
SwitzerlandSZ
SyriaSY
TaiwanTW
TajikistanTI
Tanzania, United Republic ofTZ
ThailandTH
TogoTO
TokelauTL
TongaTN

SEQ 0060 JOB L47-014-009 PAGE-0038 PT 3 PGS 36-
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CountryCode
Trinidad and TobagoTD
Tromelin IslandTE
Trust Territory of the Pacific IslandsPS
TunisiaTS
TurkeyTU
TurkmenistanTX
Turks and Caicos IslandsTK
TuvaluTV
UgandaUG
UkraineUP
United Arab EmiratesTC
United KingdomUK
UruguayUY
UzbekistanUZ
VanuatuNH
CountryCode
Vatican CityVT
VenezuelaVE
VietnamVM
Virgin Islands (British)VI
Virgin Islands (U.S.)VQ
Wake IslandWQ
Wallis and FutunaWF
West BankWE
Western SaharaWI
Western SamoaWS
YemenYM
ZaireCG
ZambiaZA
ZimbabweZI
Other CountriesOC*
*NOTE: Enter OC, Other Countries, only when the country of residence cannot be determined. If the recipient’s country of
r e s i d e n c e c a n n o t b e d e t e r m i n e d , y o u m u s t w i t h h o l d a t t h e m a x i m u m a p p l i c a b l e t a x r a t e .
RECORD NAME: RECIPIENT ‘‘Q’’ RECORD
PositionField TitleLengthDescription and Remarks
139–173Recipient Name
Line One*
35REQUIRED. Provide the FULL name of the recipient(nonresident alien or
fiduciary, foreign partnership or corporation or other foreign entity). Enter
the surname of the recipient FIRST followed by given names. Enter an
asterisk(*) immediately before the surname if the surname does not begin in
position 139. For example, ‘‘JOHNb*DOE’’ is acceptable (b denotes a
blank). If there is more than one recipient, enter the name of the first
recipient only. Since some foreign recipients will not have a Taxpayer
Identification Number (TIN), it is very important that the FULL name of the
recipient be provided. Titles, if any, must be provided in Recipient Name
Line Two. (If the recipient is unknown, an account number must be entered
inpositions 122–136
). Valid characters are alphabetic, numeric, ampersand

(&), hyphen (-), slash (/), asterisk (*), period (.), comma (,), apostrophe (’), or
blank. Failure to code an asterisk before the surname when it is not the first
name provided, will result in your file being returned for correction. Left-
justify and blank fill.
174–208Recipient Name
Line Two*
35Enter supplementary recipient name information; otherwise enter blanks. Use
this line for additional names (e.g., partners or joint owners), for trade names,
stage names, aliases, or titles. Use this line also for ‘‘care of,’’ ‘‘via,’’ or
‘‘through’’ information. Valid characters are alphabetic, numeric, blank,
ampersand (&), hyphen (-), slash (/), pound sign (#), period (.), comma (,),
apostrophe (’) and the percent (%). The percent (% [short for ‘‘in care of’’])
is valid in the first position only. Left-justify and blank fill.
209–243Recipient Name
Line Three*
35Enter additional name data if applicable; otherwise blank fill. Specifications
are precisely as for Recipient Name Line Two.
*NOTE: 105 total characters are available for name information. IRS encourages full identification of nonresident aliens (both
individuals and organizations) because data is furnished to their governments in accordance with tax treaties and exchange of
information agreements.

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RECORD NAME: RECIPIENT ‘‘Q’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
244–283Street Address40REQUIRED. Enter the recipient’s full street address. Street address should
include number, street, apartment or suite number (or P.O. Box if mail is not
delivered to street address). If the street, building, military installation or
other name is too long for the 40-character allotment of this field, Recipient
Name Line Two or Three may be used to report address information (See the
NOTE below).
This street address field may be all blank, but only for legitimate reasons; for
example, the recipient is from a small town, islet or other place where the
town or island name is sufficient to enable mail to be received. Valid
characters are alphabetic, numeric, blank, ampersand (&), hyphen (-), slash
(/), period (.), comma (,), apostrophe (’), and pound sign (#). A blank in
position 244 is NOT acceptable. Left-justify and blank fill.
NOTE: If Recipient Name Line Two or Three fields are NOT used for NAME INFORMATION, address data may be provided in
these fields. Street address data of 40 characters or less MUST be provided in the Street Address field. Street addresses of
41 to 75 characters should begin in Recipient Name Line Three and complete in the Street Address Field. A street address of
76 or more characters should begin in Recipient Name Line Two, continue in Recipient Name Line Three, and complete in
the Street Address Field.
284–308City25REQUIRED. Enter the name of City, Town, Village, Municipality or rural place
of residence of the recipient. Valid characters are as in Street Address,
EXCEPT the pound sign (#), which is not valid and a blank in position 284 is
NOT acceptable. For U.S. military installations enter either APO or FPO as
applicable. The name of the installation or ship must be entered in the Street
address Line. Left-justify and blank fill.
NOTE: For recipient addresses outside the United States, provide a City, Province Name, Postal Code, and Country Name.
Enter a City, State Code, and ZIP Code for United States recipient addresses. Do NOT provide a Country Name for United
States addresses.
309–323Province Name15Enter the name of the Province, Foreign State (but not the U.S. State),
County, Shire, District, Region, or other political subdivision. For many
countries the province (or other political subunit) is an important part of the
postal address. For Canada, the Provinceis required. Valid characters are

alphabetic, blank, ampersand (&), hyphen (-), period (.), comma (,),
apostrophe (’) or slash (/). Left-justify and blank fill.
Canadian Provinces and Codes
ProvinceProvince Code
AlbertaAB
British ColumbiaBC
ManitobaMB
New BrunswickNB
NewfoundlandNF
Nova Scotia (including Sable Island)NS
Northwest TerritoriesNT
OntarioON
Prince Edward IslandPE
QuebecPQ
SaskatchewanSK
Yukon TerritoryYK
NOTE: A Canadian province may be expressed as a two-character code from the Canadian Province Code List, written out in
full, or appropriately abbreviated.Either the Province or the Province Code must be entered. DO NOT ENTER BOTH.
324–332Postal Code9Enter a Foreign or U.S. Postal Code (ZIP Code). A Postal Code is
REQUIRED for United States and U.S. Territories, Canadian, and Australian
addresses. Withholding Agents should make an effort to obtain postal codes
for all other countries. Only alphabetic, numeric, and blank characters are
valid. Do not omit any blanks that may appear in the ZIP code. Use the
following table to format Postal Codes for the three required countries (‘‘a’’
denotes alpha characters, ‘‘n’’ denotes numerics, ‘‘b’’ denotes a blank). All
postal codes should be left-justified and blank filled.

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RECORD NAME: RECIPIENT ‘‘Q’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
CountryPostal Code Format
United States and
U.S. Territories
Canadian nnnnnbbbb or nnnnnnnnn
Australian anabnanbb
nnnnbbbbb
333–334U.S. State Code2REQUIRED for United States addresses, including U.S. territories. Enter the
appropriate postal identifier listed for APO and FPO addresses (see list of
valid state codes and postal identifiers for APO/FPO addresses in Part B. Sec.
6, Positions 115–116 of Transmitter ‘‘T’’ Record). ENTER BLANKS IF THE
RECIPIENT DOES NOT HAVE A U.S. ADDRESS.
335–354Country Name20The unabbreviated name of the recipient’s country of residence for all
addresses outside the United Statesis REQUIRED in this field. Enter blanks if

the RECIPIENT RESIDES IN the U.S., including U.S. territories and APO/
FPO. This field is NOT used to indicate the rate of tax. This may or may not
be the same country indicated in the Country Code field (Positions 137-138
of the Recipient ‘‘Q’’ Record).
Omit political titles such as ‘‘People’s Republic of,’’ ‘‘Kingdom of,’’ etc.
Use the English Language name instead of the native language name (for
example, use ‘‘Finland’’ and not ‘‘Suomi’’). Do not follow the country name
with parentheses containing such information as Virgin Islands (British).
Valid characters are alphabetic, blank, ampersand (&), and hyphen (-). Left-
justify and blank fill.
355–356Income Code2REQUIRED. Enter the income code EXACTLY as it appears below. If a given
recipient receives more than one type of income, additional ‘‘Q’’ Records
must be prepared, since only one income code may be shown per ‘‘Q’’
Record.
CodeType of Income
01Interest paid by U.S. obligators-general
02Interest on real property mortgages
03Interest paid to a controlling foreign corporation
04Interest paid by foreign corporations
05Interest on tax-free covenant bonds
06Dividends paid by U.S. corporations-general
07Dividends paid by U.S. subsidiaries to foreign parent corporations(including consent dividends)
08Dividends paid by foreign corporations
09Capital gains
10Industrial royalties
11Motion picture or television copyright royalties
12Other royalties (e.g., copyright, recording, publishing)
13Real property income and natural resources royalties
14Pensions, annuities, alimony, and/or insurance premiums
15Scholarship or fellowship grants
16Compensation for independent personal services*
17Compensation for dependent personal services*
18Compensation for teaching*
19Compensation duringstudying and
training*

20Earnings as an artist or athlete **
21Social Security benefits
22Railroad Retirement (Tier 1) benefits
23Railroad Retirement (Tier 2) benefits
24Real estate investment trust (REIT) distributions of capital gains
25Trust distributions subject to IRC section 1445
26Unsevered growing crops and timber distributions by a trust subject to IRC section 1445
27Publicly traded partnership distributions subject to IRC section 1446
28Gambling winnings
50Other income

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RECORD NAME: RECIPIENT ‘‘Q’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
*NOTE:If compensation covered under Income Codes ‘‘16–19’’ are directly attributable to the recipient’s occupation as an
artist or athlete, use Income Code ‘‘20’’ instead.
**NOTE:If Income Code 20 is used, also use Recipient Code 09 (artist or athlete) instead of Recipient Code 01
(individual), 02 (corporation), or 03 (partnership).
357–358Recipient Code2REQUIRED. Enter the appropriate code from list below. No other codes or
values are valid.
CodeType of Recipient
01Individual(Notes 1 & 2)

02Corporation(Note 2)

03Partnership(Note 2)

04Fiduciary(trust)
05Nominee
06Government or International Organization
07‘‘Tax Exempt’’ Organization(IRC section 501 (a)

08Private Foundation
09Artist or Athlete(Note 2)

10Fiduciary (estate)

11Fiduciary (other)

19Other
20Type of Recipient unknown
NOTE 1:A Recipient Code ‘‘01’’ MUST be entered when the Income Code is ‘‘21’’, ‘‘22’’, or ‘‘23’’.
NOTE 2:If Income Code 20 is used, also use Recipient Code 09 (artist or athlete) instead of Recipient Code 01
(individual), 02 (corporation), or 03 (partnership)
359–369Gross Income
Paid
11REQUIRED. Enter the Paid gross income amount in dollars and cents. An
income amount other than zero MUST be shown. Do NOT enter the decimal
point. For whole dollar amounts, the cents must be shown as zeros. For
example, $1500 should be shown as 00000150000 where the left-most five
zeros are ‘‘filler’’ and the right-most two zeros represent cents. Right-justify
and zero fill.
370Exemption Code1REQUIRED. Enter the one-digit exemption code from the list below. If the rate
of tax is other than zero percent, enter a zero in this field. If the rate of tax is
zero percent,enter the code of 1–5 that applies.

CodeAuthority for Exemption

ZeroNo exemption claimed, rate of tax is above zero percent.
1Income effectively connected with a U.S. trade or business. (AN EIN or SSN
must be entered in Positions 113–121).
2Exempt under an Internal Revenue Code section (other than portfolio
interest)*
3Income is non-U.S. sourced.**
4Exempt under tax treaty.*
5Portfolio interest exempt under an Internal Revenue Code section.***
*NOTE: If Exemption Code ‘‘2’’ or ‘‘4’’ is used in conjunction with Income Code ‘‘16’’ (Positions 355–356 in the
Recipient ‘‘Q’’ Record), the recipient’s U.S. Taxpayer Identification Number (TIN) MUST be provided in Positions 113–121
of the Recipient ‘‘Q’’ Record.

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RECORD NAME: RECIPIENT ‘‘Q’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
**NOTE: Non-U.S. source income paid to a nonresident alien is not subject to U.S. tax. Use Exemption Code 3 when
entering an amount for information reporting purposes.
***NOTE: Exemption Code ‘‘5’’ can only be used in conjunction with Income Codes ‘‘1’’, ‘‘2’’, ‘‘3’’, ‘‘4’’, or ‘‘5’’.
371Corrected Return
Indicator
1REQUIRED. Enter the one position code below to identify an Incorrect,
Corrected, or Original Return. (See Part A. Sec. 13.)
CodeDescription
ZeroIf this is an Original Return, and not part of the correction
procedure.
VIf this is (Transaction 1) to void the incorrect original return submitted.
CIf this is (Transaction 2) identifying the Corrected Return.
372–373Tax Rate2REQUIRED. Enter the appropriate tax ratefound in Publication 515,

Withholding of Tax on Nonresident Aliens and Foreign Corporations. An

appropriate rate MUST be shown. Do not use percent signs or decimal points.
For fractional rates, drop the fraction.
NOTE: When Exemption Code of ‘‘1’’ through ‘‘5’’ is used in position 370, the Tax Rate MUST be zero.
374–384U.S. Federal
Tax Withheld
11REQUIRED. Enter in dollars and cents the amount of tax withheld, if any. An
amount MUST be shown if the Tax Rate is other than ‘‘00’’, or if income is
not otherwise exempt from withholding. If Tax Rate ‘‘00’’, the amount of tax
withheld should be zero. Specifications are the same as for Positions 359-369
(Gross Income Paid). Right-justify and zero fill.
385–419Payer’s Name35Enter the name of the Payer of Income if different from the Withholding
Agent. Abbreviate as needed. If Withholding Agent and Payer are one and the
same, blank fill Payer’s Name. Valid characters are alphabetic, numeric,
blank, ampersand (&), period (.), comma (,), apostrophe (’) and hyphen (-).
Left-justify and blank fill.
420–428Payer’s TIN9Enter the Payer’s Taxpayer Identification Number if there is an entry in the
Payer Name Field. Blank fill if unknown or Payer’s Name is blank.
429Awaiting Form
W–8 Indicator
1If a filer is awaiting Form W–8 from this recipient, enter ‘‘Y’’; otherwise,
enter a blank.
430–439Foreign Student
Withholding
Allowance
Amount
10(For filers reporting Income Codes ‘‘15’’or ‘‘16’’ in Position 355–356 of

the recipient ‘‘Q’’ record.) Enter in dollars and cents the gross amount of
withholding allowances for a foreign student, if using Income Codes ‘‘15’’
with respect to a payment of U.S. source scholarships and fellowship grants
or‘‘16’’, Independent Personal Services. Do NOT enter decimal point. If the

Income Code in Position 355–356 is other than ‘‘15’’or ‘‘16’’, enter

blanks. Right-justify and zero fill when a money amount is reported.
440–449Net Income
Amount
10Enter in dollars and cents the net amount of income paid to a foreign student.
(Subtract the Foreign Student Withholding Allowance Amount (positions
430–439) from the Gross Income Paid (positions 359–369) and enter the total
here.) Do NOT enter a decimal point. If the Income Code (positions 355–356)
is other than ‘‘15’’or ‘‘16’’, enter blanks. Right-justify and zero fill if a

money amount is reported.

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RECORD NAME: RECIPIENT ‘‘Q’’ RECORD—Continued
PositionField TitleLengthDescription and Remarks
450–459Amount of State
Income Tax
Withheld
10If State Tax has been withheld for any reason, enter that amount here, in
dollars and cents. Right-justify and zero fill. If no entry, zero fill.
460–498Reserved39Blank fill.
499–500Blank or Carriage
Return Line Feed
2Enter blanks or carriage return line feed (CR/LF).
RECIPIENT ‘‘Q’’ RECORD LAYOUT
Record
Type
Withholding
Agent’s TIN
Agent’s
Name
Agent’s
Address
Agent’s
City
Agent’s
State Code
12–1011–4546–8081–100101–102
ZIP
Code
Type of
TIN
Recipient
U.S. TIN
Account
Number
Country
Code
Recipient
Name Line
One
103–111112113–121122–136137–138139–173
Recipient Name
Line Two
Recipient
Name Line
Three
Street
Address
City
Province
Name
Postal
Code
174–208209–243244–283284–308309–323324–332
U.S.
State
Code
Country
Name
Income
Code
Recipient
Code
Gross
Income
Paid
Exemption
Code
333–334335–354355–356357–358359–369370
Correct Ret
Indicator
Tax Rate
US Federal
Tax Withheld
Payer’s
Name
Payer’s
TIN
Awaiting
Form W–8
Indicator
371372–373374–384385–419420–428429
Foreign
Student
Withholding
Allow. Amt.
Net
Income
Amount
Amount of
State Tax
Withheld
Reserved
Blank or
CR/LF
430–439440–449450–459460–498499–500
SEC. 8. WITHHOLDING AGENT ‘‘W’’ RECORD
.01Enter a ‘‘W’’ Record after the last ‘‘Q’’ Record submitted for a particular Withholding Agent. The ‘‘W’’ Record
serves as a summary of the preceding ‘‘Q’’ Record data, and enables IRS to cross check the correctness of information
received.
.02Several ‘‘W’’ Records for different withholding agents may appear on the same Transmitter’s file. Also, the ‘‘W’’
Record may refer to ‘‘Q’’ Records on more than one reel, provided all of the preceding ‘‘Q’’ Records are for the same
withholding agent.
.03A ‘‘W’’ Record may only be followed by new Recipient ‘‘Q’’ Records for the next Withholding Agent, if any, or by
a tape mark and/or trailer label when more reels follow this reel, or by an End of Transmission ‘‘Y’’ Record, when this is
the last reel of the file. The ‘‘W’’ Record cannot be the last record on the file.
.04Each ‘‘W’’ Record has a fixed length of 500 positions.
.05If the field is not applicable, allow for the field by entering blanks or zeros as instructed.

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RECORD NAME: WITHHOLDING AGENT ‘‘W’’ RECORD
PositionField TitleLengthDescription and Remarks
1Record Type1REQUIRED. Enter ‘‘W’’.
2–3Tax Year2REQUIRED. Enter the last two digits of the calendar year for which income
and withholding are being reported. All recipient ‘‘Q’’ Records must report pay-
ments for this year ONLY. Different tax years may not appear on the same file.
4–12Employer
Identification
Number (EIN)
9REQUIRED. Enter the nine-digit Employer Identification Number of the
Withholding Agent. Omit the hyphen.
13–47Agent’s Name35REQUIRED. Enter the name of the Withholding Agent, up to the limit of 35
characters. Abbreviate as needed, omitting punctuation. Left-justify and blank
fill.
48–82Agent’s Address35REQUIRED. Enter the mailing address of the withholding agent. Street address
should include number, street, apartment or suite number (or P.O. Box if mail is
not delivered to street address). Abbreviate as needed, omitting punctuation.
Left-justify and blank fill.
83–102City20REQUIRED. Enter the city, town, or other locality name. If applicable enter
APO or FPO only. Left-justify and blank fill.
103–104State2REQUIRED. Enter the two-character alphabetic state code or the postal
identifier for APO/FPO addresses from the list in Part B. Sec. 6, positions 115–
116 of ‘‘T’’ Record.
105–113ZIP Code9
REQUIRED.. Enter nine numeric characters for all U.S. addresses (including
territories, possessions, and APO/FPO). For five-digit ZIP codes, left-justify and
zero fill. Zero fill for addresses outside the U.S.
114–121Total ‘‘Q’’
Record Count
8REQUIRED. Enter the total number of ‘‘Q’’ Records for this withholding
agent; that is, the total count of ‘‘Q’’ Records following the last ‘‘W’’ Record,
or if this is the first ‘‘W’’ Record on the file, the total number of ‘‘Q’’ Records
since the ‘‘T’’ Record. The presence of a ‘‘T’’ Record does not interrupt the
count, which may therefore include consecutive ‘‘Q’’ Records on more than one
tape reel. Right-justify and zero fill unused positions.
122–134Total Gross
Amount Paid
13REQUIRED. Enter the total gross amount. Calculate this total by adding the
gross income paid reported in all ‘‘Q’’ Records counted in the preceding
Positions 114–121. Do not ‘‘round off’’ this total, since it is used to verify the
total money amount from the ‘‘Q’’ records. Right-justify and zero fill.
135–147Total Tax
Withheld
13REQUIRED. Enter the total tax withheld. Calculate this total by adding the tax
withheld reported in all ‘‘Q’’ records counted in the preceding Positions 114–
121. Do not ‘‘round off’’ this total, since it is used to verify the total tax
withheld from the ‘‘Q’’ records. Right-justify and zero fill.
148–498Reserved351Blank fill.
499–500Blank or Carriage
Return Line Feed
2REQUIRED. Enter blanks or carriage return line feed (CR/LF).
WITHHOLDING AGENT ‘‘W’’ RECORD LAYOUT
Record
Type
Tax
Year
EIN
Agent’s
Name
Agent’s
Address
CityState
12–34–1213–4748–8283–102103–104

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WITHHOLDING AGENT ‘‘W’’ RECORD LAYOUT—Continued
ZIP
Code
Total
‘‘Q‘‘ Record
Count
Total
Gross Amt.
Paid
Total
Tax
Withheld
Reserved
Blank
or
CR/LF
105–113114–121122–134135–147148–498499–500
SEC. 9. END OF TRANSMISSION ‘‘Y’’ RECORD
.01The ‘‘Y’’ Record is a fixed record length of 500 positions and all positions listed are required. The ‘‘Y’’ Record is a
summary of the number of withholding agents and total number of tape reels in the entire file.
.02This record will be written after the last ‘‘W’’ Record of the entire file. End the last reel ONLY of a file with an End of
Transmission ‘‘Y’’ Record. The ‘‘Y’’ Record may only be preceded by a ‘‘W’’ Record. It may only be followed by a tape
mark, or a tape mark and a trailer label (if trailer labels are used), or a trailer label.
.03Please note that if submitting a multi-reel file, there will only be one End of Transmission ‘‘Y’’ record. The End of
Transmission ‘‘Y’’ record will be the last record in the final block on the last reel in the file.
RECORD NAME: END OF TRANSMISSION ‘‘Y’’ RECORD
PositionField TitleLengthDescription and Remarks
1Record Type1REQUIRED. Enter ‘‘Y’’.
2–4Withholding
Agent Count
3REQUIRED. Enter the total number of withholding agents on this file. This
count will be the same as the total number of ‘‘W’’ Records. Right-justify and
zero fill.
5–7Reel Count3REQUIRED. Enter the total number of reels for this transmission. Right-justify
and zero fill.
8–498Reserved491Blank fill.
499–500Blank or Carriage
Return Line Feed
2REQUIRED. Enter blanks or carriage return line feed (CR/LF).
END OF TRANSMISSION ‘‘Y’’ RECORD LAYOUT
Record
Type
Withholding
Agnet
Count
Reel
Count
Reserved
Blank
or
CR/LF
12–45–78–498499–500
PART C.BISYNCHRONOUS (MAINFRAME) ELECTRONIC FILING SPECIFICATIONS
SEC. 1. GENERAL
.01Bisynchronous electronic filing of Form 1042-S information returns is offered as an alternative to magnetic media (tape,
tape cartridge, or diskette) or paper filing, but is not a requirement. This method uses IBM 3780 communications protocols and
is used primarily by mainframe filers. Electronic filing will fulfill the magnetic media requirements for those payers who are
required to file magnetically. It may also be used by payers who are under the filing threshold.
.02Electronic filing of information returns is not affiliated with the Form 1040 electronic filing program. These two
programs are totally independent, and separate approval to participate in each of them must be obtained. All inquiries
concerning the electronic filing of information returns should be directed to IRS/MCC. IRS/MCC personnel cannot answer
questions or assist taxpayers in the filing of Form 1040 tax returns. Filers with questions of this nature will be directed to the
Taxpayer Service toll free number (1-800-829-1040) for assistance.
.03Filers participating in the electronic filing program for information returns will submit their returns to IRS/MCC by way
of modems, and not through magnetic media or paper filing.
.04If a request for extension is approved, transmitters who file electronically will be granted an extension of 30 days to file.
Part A. Sec. 11 explains procedures for requesting extensions of time. Filers are encouraged to file their data as soon as
possible.

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.05The formats of the ‘‘T,’’ ‘‘Q,’’ ‘‘W,’’ and ‘‘Y,’’ Records are the same for electronically filed records as they are for
5
1
⁄4- and 3
1
⁄2-inch diskettes, tapes and tape cartridges. For electronically filed documents, each transmission is considered a
separate file; therefore, each transmission must have an End of Transmission (EOT) ‘‘Y’’ Record.
SEC. 2. ELECTRONIC FILING APPROVAL PROCEDURE
.01Filers must obtain, or already have, a Transmitter Control Code (TCC) assigned to them prior to submitting their files
electronically. Refer to Part A. Sec. 7 for information on how to obtain a TCC.
.02Filers using bisynchronous protocols must obtain an IRS/MCC-assigned password prior to submitting test or actual data
files. To obtain a password, the following steps must be taken:
(a)Bisynchronous filers who already have a TCCto file Form 1042–S (beginning numbers ‘‘22’’) must submit either
Form 4419 or a letter to indicate that they wish to file information returns electronically.If you do not have a TCC number
or one that begins with ‘‘22’’, a new number will be assigned.
If a letter is submitted, it must contain the following:
1)Name and address of transmitter.
2)Transmitter Control Code.
3)Name and phone number of a contact person within the filer’s organization to whom a password will be assigned.
(b)Within 30 days of receiving the application or letter, IRS/MCC will send Form 6086, Time Sharing Operation (TSO)
Password Assignment, to the filer which will contain the password to be used for electronic submissions.
(c)Upon receipt of Form 6086, the user (person who will actually transmit the data) will separate the acknowledgment from
the password. Both the user and the user’s manager must sign the acknowledgment and mail to:
Chief, Security and Disclosure Branch
IRS, Martinsburg Computing Center
P.O. Box 1208
Martinsburg, WV 25401
(d)The users or filers should retain a copy of the signed acknowledgment for their records. It is the filer’s responsibility to
ensure that the password is not compromised. Access to IRS/MCC computers will not be allowed without a valid password.
After a password is received and the acknowledgment returned, the filer may submit a data file.
(e)For security reasons, all bisynchronous passwords will expire periodically, and a new password will automatically be
assigned. If filers have any questions relating to the security procedures, and/or they need to report their password has been
compromised, they must contact IRS/MCC as soon as possible by calling 1-304-263-8700, or writing to:
IRS/MCC
Information Returns Branch
P. O. Box 1359
Martinsburg, WV 25401
.03It is the user’s responsibility to remember the password and not allow the password to be compromised.
SEC. 3. TEST FILES
.01Filers are not required to submit a test file. The purpose of test files is to resolve any data or communication problems
prior to the filing season. If a filer wishes to submit an electronic test file for Tax Year1995
, it must be submitted
to IRS/MCC December 1,1995, through February 15, 1996.
.02If a filer encounters problems while transmitting electronic test files, IRS/MCC should be contacted for assistance.
.03A password must be obtained before submitting an electronic test file.
.04Bisynchronous electronic test files will be processed and filers will be notified as to the acceptability of their data within
5 workdays of the date the data and transmittal Form 4804 are received by IRS/MCC.
SEC. 4. ELECTRONIC SUBMISSIONS
.01Electronically filed information may be submitted to IRS/MCC 7 days a week, 24 hours a day, except for routine
maintenance/backup which is performed daily at 4:00 a.m. Eastern Time. Technical assistance will be available Monday
through Friday between 8:30 a.m. and 4:30 p.m. Eastern Time by calling (304) 263-8700.
.02Lengthy transmissions(100,000 or more records) are not encouraged since the transmission may be interrupted by

line noise problems.It is advisable to break lengthy files into multiple transmissions.

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.03The time required to transmit information returns electronically will vary depending on the modem speed, if IBM 3780
data compression is used, and if the records are blocked. The following transmission rate was based on an actual test file
received at MCC using 4800 bps, no compression, and one record per block:
4500 records50 minutes
SEC. 5. TRANSMITTAL REQUIREMENTS
.01All data submitted electronically is verified by transmittal Form 4804. The transmitter must send the signed Form 4804
the same day the transmission is made. No return is considered filed until a Form 4804 is received by IRS/MCC.
.02Form 4804 can be ordered by calling the IRS toll free forms and publications order number 1-800-TAX-FORM
(1-800-829-3676) or it may be computer-generated. If a filer chooses to computer-generate Form 4804, all of the information
contained on the original form, including the affidavit, must also be contained on the computer-generated form.
.03The filer whose TCC is used in the ‘‘T’’ Record is responsible for submitting the transmittal Form 4804.
.04Forms 4804 may be mailed to the following addresses:
If by Postal Service:
IRS-Martinsburg Computing Center
ATTN: Electronic Filing Coordinator
P.O. Box 1359, MS-360
Martinsburg, WV 25401-1359
If by truck or air freight:
IRS-Martinsburg Computing Center
ATTN: Electronic Filing Coordinator
Route 9 and Needy Road, MS-360
Martinsburg, WV 25401
.05A signed Form 4804 submitted for electronically filed information returns must be sent the same day as the electronic
submission.
SEC. 6. IBM 3780 BISYNCHRONOUS COMMUNICATION SPECIFICATIONS
.01Transmissions using IBM 3780 bisynchronous protocols must be in EBCDIC character code. Modems must be
compatible with either Bell 208B for 4800 bps transmissions, or AT&T 2296A for 9600 bps transmissions. Both modems are
dial-up type modems using the Public Switched Telephone Network. IBM 3780 data compression is acceptable for any
bisynchronous transmission. Records may be blocked up to 4096 bytes with INTER RECORD SEPARATORS.
.02IRS/MCC will accept information returns filed electronically over switched telecommunications network circuits. For
4800 bps, the circuit will be (304) 264-7080
. For 9600 bps, the circuit will be (304) 264-7040. Both circuits are equipped
for bisynchronous transmission using the IBM 3780 protocol.
.03The 4800 bps line terminates at a Bell 208B modem. The Bell 208B modem uses phase-shift keying and eight-phase
modulation to transmit binary serial data signals over the telephone line in half-duplex mode. The following options have
been selected:
—Transmit Level set to –4 dBm
—Compromise Equalizer in (4–Db Slope)
—DSR off in Analog Loop Mode
—Automatic Answer
—Transmitter Internally Timed
—RS–CS Interval of 50 ms
.04The 9600 bps line terminates at an AT&T Dataphone II 2296A modem. The AT&T 2296A modem is a full-duplex,
CCITT V.32 compatible unit which operates at 9600 bps or 4800 bps (fallback). The following options have been selected:
—Receiver Responds to Remote Loopback
—Loss-of-Carrier Disconnect
—Received-Space Disconnect
—Send-Space Disconnect
—Automatic Answer
—Answer on Ring 1
—DTR Interlock
—Retrain Enable
—Internal Timing
—CTS Controlled by RTS
—0-1 ms RTS to CTS Delay
—CTS Dependent on Carrier
—RR Indicates Carrier
—9600 Trellis Coding
—4800 bps Fallback
—4 dB Compromise Equalization

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SEC. 7. BISYNCHRONOUS ELECTRONIC FILING RECORD SPECIFICATIONS
.01For bisynchronous filing there are two additional identifier records which must be used to transmit data. These records
are500 positions in length and are the first ($$REQUEST) and second ($$ADD) records sent in an electronic transmission.
The purpose of these records is to provide the password and identity of the transmitter. The $$REQUEST, $$ADD and the
data file should be transmitted as one file. In some cases, filers have attempted to send the $$REQUEST and $$ADD as
separate files. Doing this will result in a failed transmission.
.02With the exception of these additional records, the file format for electronic filing is the same as for magnetic media
filing. The format of each of these records is as follows:
RECORD NAME: $$REQUEST
Field
PositionField TitleLengthDescription and Remarks
1–20$$REQUEST
Identifier
Record
20Enter the following Identifier characters: $$REQUEST ID=MSGFILE
21–500Blank480Blank
ELECTRONIC FILING IDENTIFIER $$REQUEST RECORD—RECORD LAYOUT
$$REQUEST
IDENTIFIER
RECORD
BLANK
1–20
21–500
.03Upon making contact with IRS/MCC and furnishing a valid password in the $$ADD identifier record, a data
transmission session will commence. The transmission will continue until an End of Transmission (EOT) ‘‘Y’’ record is
received. At the end of each transmission, the following message should be received electronically by the filer: ‘‘DATA
RECEIVED AT MCC’’ and the line will be disconnected. If this message is not received, there was a problem with the
submission, and the filer should contact IRS/MCC immediately.
.04Upon receiving a data file and transmittal Form 4804, IRS/MCC will release the data for further processing. If the
media cannot be processed, the filer will be notified by either letter or telephone that the data must be retransmitted. This
file name, if necessary, will be provided by IRS/MCC and is to be placed in positions 45–51 of the $$ADD record when the
file is retransmitted.
RECORD NAME: $$ADD
Field
PositionField TitleLengthDescription and Remarks
1–9$$ ADD
Identifier
Record
9Enter the following characters: $$ADD ID=
10–17Password8Enter the password assigned by IRS/MCC. For information concerning the
password, see Part C. Sec. 2.
18Blank1Enter a blank.
19–26BATCHID8Enter the following characters: BATCHID=
27Quote1Enter a single quote (’).
28–43Transmitter Name16Enter the transmitter’s name. This name should remain consistent in all
transmissions. If the transmitter’s name exceeds 16 positions, truncate the
name.

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RECORD NAME: $$ADD—Continued
Field
PositionField TitleLengthDescription and Remarks
44Type of File
Indicator
1Enter the Type of File Indicator from the list below:
O =Original filing
T =Test File
C =Correction file
R =Replacement file
45–51Replacement
File Name
7Use this field only if this is a replacement file.
Enter the replacement file name which IRS/MCC has assigned to this file.
This file name will be provided to the filer in the letter notifying them that a
replacement file is necessary. If contact is made by telephone, the
replacement file name will be given to the filer by IRS/MCC at that time. For
other than replacement files, this field will contain blanks.
52Quote1Enter a single quote (’).
53–500Blanks448Enter blanks.
ELECTRONIC FILING IDENTIFIER $$ADD RECORD—RECORD LAYOUT
$$ ADD
IDENTIFIER
RECORD
PASSWORDBLANKBATCHIDQUOTE
TRANSMITTER
NAME
1–910–171819–262728–43
TYPE OF
FILE
INDICATOR
REPLACEMENT
FILE NAME
QUOTEBLANKS
4445–5152
53–500
PART D.ASYNCHRONOUS (IRP–BBS) ELECTRONIC FILING SPECIFICATIONS
SEC. 1. GENERAL
.01Asynchronous electronic filing of Form 1042–S originals, corrections, and replacements of information returns is
offered as an alternative to magnetic media (tape, tape cartridge, or diskette) or paper filing, but is not a requirement.
Electronic filing using the Information Reporting Program Bulletin Board System (IRP–BBS) will fulfill the magnetic media
requirements for those filers who are required to file magnetically. It may also be used by those payers who are under the
filing threshold requirement, but would prefer to file their information returns this way. If the original file was sent
magnetically, but was returned for replacement, the replacement may be transmitted electronically. Also, if the original file
was submitted via magnetic media, any corrections may be transmitted electronically.
.02The electronic filing of information returns is not affiliated with the Form 1040 electronic filing program. These two
programs are totally independent, and filers must obtain separate approval to participate in each of them. All inquiries
concerning the electronic filing of information returns should be directed to IRS/MCC. IRS/MCC personnel cannot answer
questions or assist taxpayers in the filing of Form 1040 tax returns. Filers with questions of this nature will be directed to
the Taxpayer Service toll free number (1-800-829-1040) for assistance.
.03Filers participating in the electronic filing program for information returns will submit their returns to IRS/MCC by
way of modems and not through magnetic media or paper filing.
.04If a request for extension is approved, transmitters who file electronically will be granted an extension of 30 days to
file. Part A. Sec. 11 explains procedures for requesting extensions of time. Filers are encouraged to file their data as soon as
possible.
.05The formats of the ‘‘T,’’ ‘‘Q,’’ ‘‘W,’’ and ‘‘Y’’ Records are the same for electronically filed records as they are for
5
1
⁄4- and 3
1
⁄2-inch diskettes, tapes, and tape cartridges. For electronically filed documents, each transmission is considered a
separate file.

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SEC. 2. ELECTRONIC FILING APPROVAL PROCEDURE
.01Filers must obtain, or already have, a Transmitter Control Code (TCC) assigned to them prior to submitting their files
electronically. Filers who currently have a TCC for magnetic filingof Form 1042–S (beginning with numbers
‘‘22’’) do not have to request a second TCC for electronic filing. Refer to Part A. Sec. 7 for information on how
to obtain a TCC.
.02Once a TCC is obtained, filers using IRP–BBS assign their own passwords and do not need special approval.
.03With all passwords, it is the user’s responsibility to remember the password and not allow the password to be
compromised. However, if filers do forget their password, call (304) 263-8700 for assistance. Note: Passwords on the IRP-
BBS are case sensitive.
SEC. 3. TEST FILES
.01Filers are not required to submit a test file; however, the submission of a test file is encouraged for first time
electronic filers in order to resolve any data or communication problems prior to the filing season. If filers wish to submit an
electronic test file for Tax Year1995, it must be submitted to IRS/MCC December 1,1995, through
February 15,1996.
.02If problems are encountered while transmitting the electronic test file, contact IRS/MCC for assistance.
.03Filers can verify the status of their transmitted test data by dialing the IRP–BBS. This information will be available
within10 workdays after their transmission is received by IRS/MCC.
SEC. 4. ELECTRONIC SUBMISSIONS
.01Electronically filed information may be submitted to IRS/MCC 24 hours a day, 7 days a week. Technical assistance
will be available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern Time by calling (304) 263-8700.
.02Filers may submit as many documents as they choose electronically. Filers are allowed 240 minutes a day; however,
more time may be requested if needed.
.03Do not transmit data using IRP–BBS January 1 through January 7. This will allow time for the IRP–BBS to be
updated to reflect current year changes.
.04Data compression is encouraged when submitting information returns by way of the IRP–BBS. MCC has the ability to
decompress files created using several popular software compression programs such as ARC, LHARC, and PKZIP. Software
data compression can be done alone or in conjunction with V.42bis hardware compression. Transmission time can be
reduced by as much as 85 percent when data compression is used; therefore, it is highly recommended.
The time required to transmit information returns electronically will vary depending on the modem speed and the type of
data compression used, if any. However, transmissions to IRP–BBS will be significantly faster than electronic filing to the
mainframe.
The following are actual transmission rates achieved in test uploads at MCC using compressed files (PKZIP) and the
xmodem protocol. The actual transmission rates will vary depending on the protocol that is used. (Uploads will be
approximately 25% faster when using the XMODEM-1K or ZMODEM protocols.)
Transmission
Speed in bps500 Records2500 Records10000 Records
24002 min 55 sec10 min 25 sec55 min 10 sec
96001 min 5 sec4 min 35 sec21 min 20 sec
19200 41 sec2 min 51 sec13 min 23 sec
38400 25 sec1 min 55 sec9 min 10 sec
.05Files submitted to IRP–BBS must have a unique filename; therefore, the IRP–BBS will build the filename that must
be used. The name will consist of the filer’s TCC, submission type (T = Test, P = Production, C = Correction, and R =
Replacement) and a sequence number. Filers may call the file anything they choose on their end. The sequence number will
be incremented every time they send, or attempt to send, a file. Record the upload date, time, and filename. This information
will be needed by MCC in order to identify the file if assistance is required and to complete Form 4804.

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SEC. 5. TRANSMITTAL REQUIREMENTS
.01The results of the electronic transmission will be posted to the (F)ile Status area of the IRP–BBS, however, no further
processing will occur until the signed Form 4804 is received. The transmitter must send the signed Form 4804 the
same day the electronic transmission is made. No return is considered filed until a Form 4804 is received by IRS/MCC.
.02Form 4804 can be ordered by calling the IRS toll free forms and publication order number 1-800-TAX-FORM,
(1-800-829-3676) downloaded from the IRP–BBS, or it may be computer generated. If a filer chooses to computer-generate
Form 4804, all of the information contained on the original form, including the affidavit, must also be contained on the
computer-generated form.
.03The filer whose TCC is used in the ‘‘T’’ Record is responsible for submitting the transmittal Form 4804.
.04Forms 4804 may be mailed to the following addresses:
If by Postal Service:
IRS-Martinsburg Computing Center
ATTN: Electronic Filing Coordinator
P.O. Box 1359, MS-360
Martinsburg, WV 25401-1359
If by truck or air freight:
IRS-Martinsburg Computing Center
ATTN: Electronic Filing Coordinator
Route 9 and Needy Road, MS-360
Martinsburg, WV 25401
.05A signed Form 4804 submitted for electronically-filed information returns must still be sent the same day as the
electronic transmission.
SEC. 6.INFORMATION REPORTING PROGRAM BULLETIN BOARD SYSTEM (IRP–BBS) SPECIFICATIONS
.01The IRP–BBS is an electronic bulletin board system available to filers of information returns. In addition to filing
information returns electronically, the IRP–BBS provides other capabilities. Some of the advantages of IRP–BBS are as
follows:
(1)Notification within10 workdays as to the acceptability of the data transmitted.
(2)Immediate access to the latest changes and updates that affect the Information Reporting Program at IRS/MCC
(program, legislative, etc.).
(3)Access to publications such as the Publication 1187 as soon as they are available.
(4)Capability to communicate with IRS/MCC personnel.
(5) Ability to retrieve information and files applicable to the IRP–BBS.
.02The IRP–BBS is available for public use and accessible using various personal computer communications equipment;
however, electronic submission of information returns is limited to holders of valid TCCs. A TCC is not needed to access
those portions of the IRP–BBS that contain forms and publications or to leave questions or messages for IRS/MCC
personnel.
.03Filers using IRP–BBS can determine the acceptability of files submitted by checking the file status area of the bulletin
board. These reports are not immediately available but will be available10 workdays after the transmission is received by
IRS/MCC.
.04Contact the IRP–BBS by dialing (304) 264-7070. The communication software settings for IRP–BBS are:
—No parity
—Eight data bits
—One stop bit
—Full duplex
The communication software should be set up to use the fastest speed allowed by the filer’s modem.
.05 Due to the large number of communication products available, it is impossible to provide specific information on a
particular software package or hardware configuration. Filers should contact their software or hardware supplier for
assistance.
.06IRP–BBS software provides a menu-driven environment allowing access to different parts of IRP–BBS. Whenever
possible, IRS/MCC personnel will provide assistance in resolving any communication problems with IRP–BBS.

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.07IRP–BBS can be accessed at speeds from 1200 to 28,800 bps. The speed is automatically negotiated for connection at
the speed of the calling modem. The communication standards supported include Industry Standard 212A, V.22bis, V.32,
V.32bis, V.34, and V.FC. Point-to-point error control is supported using the V.42 ITU–T standard or MNP 2–4. Data
compression is supported using V.42bis ITU–T standard or MNP5.
SEC. 7. IRP–BBS FIRST LOGON PROCEDURES
.01The following information will be requested to set up the filer’s user profile when logging onto the IRP–BBS for the
first time.
(A) # Chars per line on screen (10–132)? (Most computers have 80 character screen display)
(B)Enter the letter, that corresponds to the filer’s terminal, from the following:
,A.IBM PC,B.IBM w/ANSI,C.Atari
,D.ADM–3,E.H19/Z19/H89,F.Televid 925
,G.TRS–80,H.Vidtex,I.VT–52
,J.VT–100,CR.if none of the above
Most PCS, clones, etc., will select the IBM PC emulation. Machines with color, CGA, EGA, or VGA should select IBM
w/ANSI.
(C)Upper/lower case, line feed needed, O (zero) nulls after each ,CR., do you wish to modify this? (Most users
answer no.)
(D)Do you wish to have a pause after each display page (Y/N)? (Most users answer yes.)
(E)How many lines per display page (10-80)? (Most computers have a 24 line screen display.)
COMMON USER PROBLEMS
PROBLEMPROBABLE CAUSESOLUTION
File does not upload/downloadNot starting communication when
prompted by ‘Awaiting Start Signal’
Start upload/download on filers end
All files not processedCompressing several files into one
filename
Compress only one file for every
filename
Replacement neededOriginal data incorrectReplacement must be submitted within
45 days of original transmission
Cannot determine file statusNot dialing back thru IRP–BBS to
check the status of the file
Within10 days after sending a file,
check under (F)ile Status for notifica-
tion of acceptability
Transfer aborts before it startsTransfer protocol mismatchEnsure protocols match on both the
sending and receiving ends
Loss of carrier during sessionIncorrect modem settings on user’s endReference your modem manual about
increasing the value of the S10 register
IRS ENCOUNTERED PROBLEMS
PROBLEMPROBABLE CAUSESOLUTION
Unreadable screens after selecting
‘‘IBM w/ANSI’’
ANSI.SYS driver not lodaded in the
user’s PC
Consult your DOS manual about in-
stalling ANSI.SYS
IRS cannot complete final processing
of data
User did not mail the Form 4804Mail completed Form 4804 the same
day as the electronic transmission
IRS cannot determine which file is
being replaced
User did not indicate which file is
being replaced
Must enter the filename that is being
replaced under the replacement option
IRS cannot determine the type of file
being sent
User incorrectly indicated T, P, C, or R
for the type of file
When prompted, enter the correct type
of file for data being sent
Incorrect file not replaced within 45
days
User did not dial back thru IRP–BBS
to check the status of file
Within10 workdays check under (F)ile
Status for notification of acceptability
Duplicate dataTransmitter sends corrections for entire
file
Only submit corrections for incorrect
records

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PART E.MAGNETIC/ELECTRONIC SPECIFICATION FOR EXTENSION OF TIME
SEC. 1. GENERAL INFORMATION
NOTE: The specifications which follow for requesting an extension of time magnetically or electronically DO NOT APPLY
to Form 1042. Form 1042 is not an information return.
.01The specifications in Part E include the required 200-byte record format for extension of time to file requests
submitted on magnetic media or via IRP–BBS. Also included are the instructions for the information that is to be entered in
the record. Withholding Agents are advised to read this section in its entirety to ensure proper filing.
.02Requests for extensions of time may be made for Form 1042–S.
.03For Tax Year 1995 (returns due to be filed in 1996), transmitters requesting an extension of time to file for
more than 50 withholding agents are required to file the extension request on magnetic media or via IRP–BBS.
Transmitters requesting an extension of time for 10 or more withholding agents are encouraged to file the
request magnetically or electronically. Acceptable types of media are tape, tape cartridge, and 5
1
⁄4- and 3
1
⁄2-inch diskette.
.04For an extension request filed on magnetic media, the transmitter must send the completed, signed Form 8809,
Request for Extension of Time to File Information Returns, in the same package as the corresponding media. For extension
requests filed electronically, the transmitter must send the Form 8809 the same day the transmission is made.
.05Withholding Agents, or Transmitters submitting a request for extension of time for multiple withholding agents,
should not submit a list of agent’s names and TINS with the Form 8809 with the magnetic media or electronic files.
.06To be considered, an extension request must be postmarked or transmitted by the due date of the return; otherwise,
the request will be denied.
.07The extension record format is also on the IRP–BBS and can be downloaded. See Part D for more information on how
to contact the IRP–BBS.
.08A magnetically-filed request for an extension of time should be sent using the following addresses:
If by Postal:
IRS-Martinsburg Computing Center
ATTN: Extension of Time Coordinator
P O Box 879, MS-360
Kearneysville, WV 25430
If by truck or air freight:
IRS-Martinsburg Computing Center
ATTN: Extension of Time Coordinator
Route 9 and Needy Road, MS-360
Martinsburg, WV 25401
Note: Due to the large volume of mail received by IRS/MCC and the time factor involved in processing the Form 8809, it
is imperative that the attention line be present on all envelopes or packages containing Extension of Time (EOT) requests.
.09If using a delivery service other than postal service, the actual date of receipt by IRS/MCC will be used as the
received date. This should be considered in meeting filing requirements timely.
.10Withholding Agents who submit their extension of time requests magnetically or electronically will receive a letter
from IRS/MCC with an attached list of multiple withholding agents and their TINs (EIN or SSN) specifying approval and/or
denial.
.11Do not submit tax year1995 extension of time to file requests on magnetic media or electronically before January 1,
1996.
.12Filers may request an extension of time as soon as they are aware that an extension is necessary but not later than
the due date of the return. It will take a minimum of 30 days for IRS/MCC to respond to an extension request. Under
certain circumstances a request for an extension of time could be denied. In such cases, the withholding agent receives
a denial letter. When this denial letter is received, the transmitter has 20 days to provide the additional or necessary
information and resubmit the extension request to IRS/MCC.

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.13Each piece of magnetic media must have an external label containing the following information:
(a)Withholding agent’s name (Transmitter’s name if reporting for multiple withholding agents)
(b)Transmitter Control Code (TCC) beginning with the numbers ‘‘22.’’
(c) Tax year
(d) The words ‘‘Extension of Time’’
(e) Record count
Form 5064 (Media Label) or transmitter generated substitute may be used.
.14A request for an extension of time to file is not automatically granted. Approval or denial is dependent on information
provided on the Form 8809.
.15If an additional extension of time is needed, a second Form 8809 may be submitted before the end of the initial
extension. Line 7 on the form should be checked to indicate that the original extension has been received and the additional
extension is being requested. A second 30-day extension will be approved only in cases of extreme hardship or
catastrophic event.
.16See Part A. Sec. 11, for complete information on requesting an extension of time to file information returns. If there
are additional questions or concerns, contact IRS/MCC.
SEC. 2 MAGNETIC TAPE, TAPE CARTRIDGE, 5
1
⁄4- AND 3
1
⁄2-INCH DISKETTE, AND IRP–BBS SPECIFICATIONS
.01 Tape specifications are as follows:
(a)9 track.
(b)EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Information
Interchange) recording mode.
(c)1600 or 6250 BPI.
(d)Fixed block size of 4000 bytes.
(e)Record length of 200 bytes.
(f)Labeled or unlabeled tapes may be submitted.
.02Tape cartridge specifications are as follows:
(a)Must be IBM 3480, 3490 or AS400 compatible.
(b)Must meet American National Standard Institute ANSI) standards and have the following characteristics:
(1)Tape cartridges will be
1
⁄2 inch tape contained in plastic cartridges which are approximately 4 inches by 5 inches by 1
inch in dimension.
(2)Magnetic tape will be chromium dioxide particle based
1
⁄2 inch tape.
(3)Cartridges will be 18-track or 36-track parallel. Indicate on Form 5064, Media Label, in the box ‘‘Operating System/
Hardware,’’ whether the tape cartridge is 18- or 36-track.
(4)Mode will be full function.
(5)The data may be compressed using EDRC (Memorex) or IDRC (IBM) compression.
(6)Either EBCDIC or ASCII.
(c)Fixed block size of 4000 bytes.
(d)Record length of 200 bytes.
(e)Labeled or unlabeled tape cartridges may be submitted.
.03Diskette specifications are as follows:
(a) 5
1
⁄4- or 3
1
⁄2-inches in diameter.
(b)ASCII recording mode only. Additional specifications may be found in Part B. Sec. 4, of this revenue procedure.
(c)Record length of 200 bytes.
(d)Diskettes must be created using the MS/DOS operating system.
(e)Filename of IRSEOT must be used. No other filenames are acceptable. If a file will consist of more than one diskette,
the filename IRSEOT will contain a three-digit extension. This extension will indicate the sequence of the diskettes within
the file. For example, the first diskette will be named IRSEOT.001, the second diskette will be name IRSEOT.002, etc.
(f)Delimiter character commas (,) must not be used.
(g)Positions 199 and 200 of each record have been reserved for use as carriage return/line feed (cr/lf) characters, if
applicable.
.04IRP–BBS specifications include:
(a)Transmitter must have Transmitter Control Code Number (TCC). (Be sure to use the TCC assigned for submitting
1042–S information.)
(b)IRP–BBS access phone number is (304) 264-7070.

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(c)Communications software settings are:
—No parity
—Eight date bits
—One stop bit
—Full duplex
(d)Access speeds from 1,200 to 28,800 bps.
(e)Data compression is encouraged.
See Part D, IRP–BBS Electronic Filing Specifications, for detailed information on filing with IRS/MCC via IRP/BBS.
SEC. 3. RECORD LAYOUT
.01Positions 6 through 174 of the following record should contain information about the withholding agent for whom the
extension of time to file is being requested. Do not enter transmitter information, unless filing for multiple withholding
agents, in these fields.Only one TCC may be present in a file. Please be sure to use the TCC assigned for 1042–S filing
which begins with digits 22.
Field
PositionField TitleLengthDescription and Remarks
1–5Transmitter
Control Code
(TCC)
5Required. Enter the five digit Transmitter Control Code issued by IRS.
Only oneTCC per file is acceptable.

6–14Withholding
Agent’s TIN—
Form 1042–s
9Required. Must be the valid nine-digit EIN/SSN assigned to the Withholding
Agent. Do not enter blanks,hyphens or alpha characters. All zeros, ones,
twos, etc. will have the effect of an incorrect TIN. For foreign entities that are
not required to have a TIN, this field may be blank; however, the Foreign
Entity Indicator, position 176, must be set to ‘‘X.’’
15–54Withholding
Agent’s Name
40Required. Enter the name of the withholding agent whose TIN appears in
positions 6–14. Left justify.
55–94Second Agent
Name
40If additional space is needed, this field may be used to continue name line
information; otherwise, enter blanks.
95–134Withholding
Agent’s Address
40Required. Enter agent’s address. Street address should include number, street,
apartment or suite number (or P.O. Box if mail is not delivered to a street
address).
135–163Withholding
Agent’s City
29Required. Enter agent’s city, town, or post office.
164–165Withholding
Agent’s State
2Required. Enter agent’s valid U.S. Postal Service state abbreviation (refer to
Part B. Sec. 6, [positions 115–116]).
166–174Withholding
Agent’s Zip Code
9Required. Enter agent’s ZIP code. If using a five-digit ZIP code, left justify
information and fill unused positions with blanks.
175Document
Indicator
1Required. Enter the document you are requesting an extension of time for
using the following code:
CodeDocument
41042–S
Do not enter any other value in this field when requesting an extension for Form
1042–S.
176Foreign Entity
Indicator
1Enter character ‘‘X’’ if the payer is a foreign entity.
177–198Blank22Enter blanks.
199–200Blank2Enter blanks. Diskette filers may code the ASCII carriage return/line feed (cr/
lf) characters.

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TRANSMITTER
CONTROL
CODE
AGENT EIN
AGENT
NAME
SECOND
AGENT
NAME
AGENT
ADDRESS
AGENT
CITY
1–56–1415–5455–9495–134135–163
AGENT
STATE
AGENT
ZIP
CODE
DOCUMENT
INDICATOR
FOREIGN ENTITY
INDICATOR
BLANK
164–165166–174175176177–198
BLANK
OR
CR/LF
199–200
This is the end of Publication 1187 for Tax Year1995.

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Part IV. Items of General Interest
Continued Use of the August 1993
Revision of Form 706
Announcement 96–1
Executors and return preparers
should continue to use the August 1993
revision of Form 706, United States
Estate (and Generation-Skipping Trans-
fer) Tax Return, after December 31,
1995. The August 1993 revision shows
an OMB expiration date of December
31, 1995, but the Service has received
approval from the Office of Manage-
ment and Budget to continue to use
that revision. Unless the Service issues
future instructions to the contrary, it
should be used for the estates of all
decedents dying before January 1,
1996.
The Service anticipates that a revised
Form 706 will be available in early
1996. If pending estate tax legislation
is enacted, the new revision of Form
706 will incorporate changes included
in the new legislation. Availability of
the new revision depends on the date of
enactment of the legislation. As cur-
rently planned, the new revision will be
used only for decedents dying after the
date of enactment of that legislation.
Tax on Certain Imported Substances;
Filing of Petitions
Announcement 96–2
This announces the acceptance, un-
der Notice 89–61, 1989–1 C.B. 717, of
a petition requesting that butyl benzyl
phthalate be added to the list of taxable
substances in §4672(a)(3). Publication
of this notice is in compliance with
Notice 89–61. This is not a determina-
tion that the list of taxable substances
should be modified. Any modification
of the list of taxable substances based
upon this petition would be effective
April 1, 1991.
Before a determination is made, con-
sideration will be given to any written
comments (a signed original and eight
(8) copies) that are submitted timely to
the IRS. Written comments and re-
quests for a public hearing relating to
these petitions must be received by
February 12, 1996. Send submissions
to: CC:DOM:CORP:R (Petition), Room
5228, Internal Revenue Service, POB
7604, Ben Franklin Station, Wash-
ington, DC 20044. In the alternative,
submissions may be hand delivered
between the hours of 8 a.m. and 5 p.m.
to: CC:DOM:CORP:R (Petition), Cou-
rier’s Desk, Internal Revenue Service,
1111 Constitution Avenue NW, Wash-
ington, DC. All comments will be
available for public inspection and
copying. A public hearing may be
scheduled if requested in writing by a
person that timely submits written
comments. If a public hearing is
scheduled, notice of the date, time, and
place for the hearing will be published
in the Federal Register.
The petition was received on June
25, 1990. The petitioner is Monsanto
Company, a manufacturer and exporter
of this substance. The following is a
summary of the information contained
in the petition. The complete petition is
available in the Internal Revenue Serv-
ice Freedom of Information Reading
Room.
HTS number:2917.39.2000
CAS number:85–68–7
Butyl benzyl phthalate is derived
from the taxable chemicals methane,
propylene, xylene, toluene, and chlo-
rine and is a liquid produced predomi-
nantly by the reaction of n-butanol and
phthalic anhydride, followed by a reac-
tion with benzyl chloride in the pres-
ence of a catalyst. n-butanol is man-
ufactured by the hydrogenation of
n-butyraldehyde, which is derived from
propylene and synthesis gas (hydrogen
and synthesis gas are derived from
natural gas). Benzyl chloride is pro-
duced by direct photochemical chlo-
rination of toluene. Phthalic anhydride
is produced by the reaction of o-xylene
with air in the presence of a catalyst.
The stoichiometric material con-
sumption formula for this substance is:
CH
4
(methane) + C
3
H
6
(propylene) +
C
8
H
10
(xylene) + 3 O
2
(oxygen) +
C
7
H
8
(toluene) + Cl
2
(chlorine)
----. C
19
H
20
O
4
(butyl benzyl
phthalate) + 2 HCl (hydrochloric
acid) + H
2
(hydrogen) + 2 H
2
O
(water)
According to the petition, taxable
chemicals constitute 77.25 percent by
weight of the materials used to produce
this substance. The rate of tax for this
substance would be $5.54 per ton. This
is based upon a conversion factor for
methane of 0.05, a conversion factor
for propylene of 0.17, a conversion
factor for xylene of 0.47, a conversion
factor for toluene of 0.32, and a con-
version factor for chlorine of 0.26.
The principal author of this an-
nouncement is Ruth Hoffman, Office of
Assistant Chief Counsel (Passthroughs
and Special Industries). For further
information regarding this announce-
ment contact Ruth Hoffman on (202)
622-3130 (not a toll-free number).
Foundations Status of Certain
Organizations
Announcement 96–3
The following organizations have
failed to establish or have been unable
to maintain their status as public
charities or as operating foundations.
Accordingly, grantors and contributors
may not, after this date, rely on
previous rulings or designations in the
Cumulative List of Organizations (Pub-
lication 78), or on the presumption
arising from the filing of notices under
section 508(b) of the Code. This listing
does not indicate that the organizations
have lost their status as organizations
described in section 501(c)(3), eligible
to receive deductible contributions.
Former Public Charities. The fol-
lowing organizations (which have been
treated as organizations that are not
private foundations described in section
509(a) of the Code) are now classified
as private foundations:
Affordable Housing Council Inc., St.
Louis, MO
American Federation of Investors &
Consumers Inc., Harerford, PA
ANSAR Foundation, Springfield, OH
Archway Programs Pennsylvania, Inc.,
Atco, New Jersey
Barboursville Youth Basketball
League Inc., Barboursville, WV
Citizens For A Better Environment,
Inc., Tavares, FL
Child Care Professional Services,
Inc., Greenville, SC

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Columbus Historical Society,
Columbus, OH
Columbus Matrix Foundation,
Westerville, OH
Dickinson Iron Community Services
Agency, Iron Mountain, MI
Down Syndrome of Louisville Inc.,
Louisville, KY
Eagles Booster Club, Fort Knox, KY
Earth Foundation, Inc., Tampa, FL
Families In Action Of Washington
Township, Indianapolis, IN
Fastbreak Foundation Incorporated,
Canton, OH
Great Works Production Company,
Cleveland Heights, OH
Greater Cherry Hill Chamber of
Commerce Foundation, Inc., Cherry
Hill, New Jersey
Greater Columbus Concert Band,
Reynoldsburg, OH
Gulf Classics Corporation, Naples, FL
Herman J Russell Entrepreneurial
Scholarship Foundation, Inc.,
Atlanta, GA
Indianapolis Coliseum Youth Hockey
Association Inc., Indianapolis, IN
Innovative Links, Inc., Paris, AR
LHS Adult Boosters, Lakewood, OH
Miami Valley Kids Wrestling
Association Inc., Dayton, Ohio
National New Church Conference
Inc., Rensselaer, IN
Needy Childrens Fund, Kokomo, IN
New Life World Ministry, Kentwood,
LA
Northern Illinois Heart Institute Inc.,
Elgin, IL
Parkersburg Area Diabetes
Association, Parkersburg, WV
Patopsco River Publications, Inc.,
Westminister, MD
Roane County Humane Society-
Authority, Inc., Spencer, WV
Saginaw Hockey Foundation,
Saginaw, MI
The Christifidelis Community,
Columbus, Ohio
Washington County Land Quality
Foundation, Inc., Keedysville, MD
Whitman School Organization
Marquette Michigan, Marquette, MI
If an organization listed above sub-
mits information that warrants the
renewal of its classification as a public
charity or as a private operating foun-
dation, the Internal Revenue Service
will issue a ruling or determination
letter with the revised classification as
to foundation status. Grantors and
contributors may thereafter rely upon
such ruling or determination letter as
provided in section 1.509(a)–7 of the
Income Tax Regulations. It is not the
practice of the Service to announce
such revised classification of founda-
tion status in the Internal Revenue
Bulletin.

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Definition of Terms
Revenue rulings and revenue proce-
dures (hereinafter referred to as ‘‘rul-
ings’’) that have an effect on previous
rulings use the following defined terms
to describe the effect:
Amplified describes a situation where
no change is being made in a prior
published position, but the prior posi-
tion is being extended to apply to a
variation of the fact situation set forth
therein. Thus, if an earlier ruling held
that a principle applied to A, and the
new ruling holds that the same princi-
ple also applies to B, the earlier ruling
is amplified. (Compare with modified,
below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in
a prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously
published ruling and points out an
essential difference between them.
Modified is used where the substance
of a previously published position is
being changed. Thus, if a prior ruling
held that a principle applied to A but
not to B, and the new ruling holds that
it applies to both A and B, the prior
ruling is modified because it corrects a
published position. (Compare with am-
plified and clarified, above).
Obsoleted describes a previously
published ruling that is not considered
determinative with respect to future
transactions. This term is most com-
monly used in a ruling that lists
previously published rulings that are
obsoleted because of changes in law or
regulations. A ruling may also be
obsoleted because the substance has
been included in regulations subse-
quently adopted.
Revoked describes situations where
the position in the previously published
ruling is not correct and the correct
position is being stated in the new
ruling.
Superseded describes a situation
where the new ruling does nothing
more than restate the substance and
situation of a previously published
ruling (or rulings). Thus, the term is
used to republish under the 1986 Code
and regulations the same position pub-
lished under the 1939 Code and regula-
tions. The term is also used when it is
desired to republish in a single ruling a
series of situations, names, etc., that
were previously published over a
period of time in separate rulings. If
If the new ruling does more than
restate the substance of a prior ruling, a
combination of terms is used. For
example, modified and superseded de-
scribes a situation where the substance
of a previously published ruling is
being changed in part and is continued
without change in part and it is desired
to restate the valid portion of the
previously published ruling in a new
ruling that is self contained. In this
case the previously published ruling is
first modified and then, as modified, is
superseded.
Supplemented is used in situations in
which a list, such as a list of the names
of countries, is published in a ruling
and that list is expanded by adding
further names in subsequent rulings.
After the original ruling has been
supplemented several times, a new
ruling may be published that includes
the list in the original ruling and the
additions, and supersedes all prior
rulings in the series.
Suspended is used in rare situations
to show that the previous published
rulings will not be applied pending
some future action such as the issuance
of new or amended regulations, the
outcome of cases in litigation, or the
outcome of a Service study.
Abbreviations
The following abbreviations in current use and
formerly used will appear in material published
in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C.—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contribution Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign Corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statements of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

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Numerical Finding List
1
Bulletins 1996–1
Revenue Procedures:
96–1, 1996–1 I.R.B. 8
96–2, 1996–1 I.R.B. 60
96–3, 1996–1 I.R.B. 82
96–4, 1996–1 I.R.B. 94
96–5, 1996–1 I.R.B. 129
96–6, 1996–1 I.R.B. 151
96–7, 1996–1 I.R.B. 185
96–8, 1996–1 I.R.B. 187
Revenue Rulings:
96–1, 1996–1 I.R.B. 7
1
A cumulative list of all Revenue Rulings,
Revenue Procedures, Treasury Decisions, etc.,
published in Internal Revenue Bulletins 1995–27
through 1995–52 will be found in Internal
Revenue Bulletin 1996–1, dated January 2, 1996.

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Finding List of Current Action on
Previously Published Items
1
Bulletins 1996–1
*Denotes entry since last publication
Revenue Procedures:
91–22
Modified by
96–1, 1996–1 I.R.B. 8*
92–20
Modified by
96–1, 1996–1 I.R.B. 8*
92–85
Modified by
96–1, 1996–1 I.R.B. 8*
95–1
Superseded by
96–1, 1996–1 I.R.B. 8*
95–2
Superseded by
96–2, 1996–1 I.R.B. 60*
95–3
Superseded by
96–3, 1996–1 I.R.B. 82*
95–4
Superseded by
96–4, 1996–1 I.R.B. 94*
95–5
Superseded by
96–5, 1996–1 I.R.B. 129*
95–6
Superseded by
96–6, 1996–1 I.R.B. 151*
95–7
Superseded by
96–7, 1996–1 I.R.B. 185*
95–8
Superseded by
96–8, 1996–1 I.R.B. 187*
95–50
Superseded by
96–3, 1996–1 I.R.B. 82*
1
A cumulative finding list for previously
published items mentioned in Internal Revenue
Bulletins 1995–27 through 1995–52 will be
found in Internal Revenue Bulletin 1996–1, dated
January 2, 1996.