Publication 1220, Specifications for Filing Forms 1098, 1099, 5498 and W-2G Electronically or Magnetically

FIRST TIME FILERS QUICK REFERENCE GUIDE

1) FORM 4419 – Submit Form 4419, Application For Filing Information Returns Electronically (see the forms section in the back of Publication 1220), to IRS/ECC no later than thirty days before the due date of your information returns. IRS/ECC will issue a Transmitter Control Code (TCC). The TCC is required on all files, transmittals and correspondence.

2) FILING METHOD – File information returns (Forms 1098 Series, 1099 Series, 5498 Series and W-2G) electronically via the Internet (see Part B) or by mailing an acceptable type of tape cartridge (see Part C).

3) FILE FORMAT – The format must conform to the specifications in Publication 1220, Part D. Filers may contact an outside vendor to purchase software or transmit files.

4) TEST FILES – IRS/ECC encourages first-time electronic filers to submit a test file (see Part B, Sec.4). A test file is only required when applying to participate in the Combined Federal/State Filing Program (see Part A, Sec. 12).

5) COMMON PROBLEMS – Review Part A, Sec.15 to avoid common processing and/or format errors before submitting your file.

6) SUBMIT FILE – Before sending a magnetic media file, review the “Before You Mail Check List” located with the Forms in the back of the Publication 1220.

FOR ASISTANCE

Contact the IRS/ECC Information
Reporting Program Customer Service Section (IRP/CSS)

Toll-free 1-866-455-7438
Monday through Friday from 8:30 am to 4:30 pm EST
or email at mccirp@irs.gov

Rev. Proc. 2007-5 1

Use this Revenue Procedure to prepare Tax Year 2007 and prior year information returns for submission to Internal Revenue Service (IRS) using any of the following:

- Electronic Filing

- Tape Cartridge

Caution to filers:

Please read this publication carefully. Persons or businesses required to file information returns electronically or magnetically may be subject to penalties for failure to file or include correct information if they do not follow the instructions in this Revenue Procedure.

IMPORTANT NOTES:

IRS/ECC-MTB now offers an Internet connection at http://fire.irs.gov for electronic filing. The Filing Information Returns Electronically (FIRE) System will be down from 2 p.m. E.S.T. Dec. 20, 2007, through Jan. 2, 2008 for upgrading. It is not operational during this time for submissions. The FIRE System does not provide fill-in forms for information returns.

IRS/ECC-MTB no longer accepts 31/2-inch diskettes for filing information returns.

Tax year 2007 is the last year IRS/ECC-MTB will accept tape cartridges for the filing of information returns. Tape cartridges must be received by DECEMBER 1, 2008 in order to be processed for the current year. After December 1, 2008, electronic filing will be the ONLY acceptable method to file information returns at ECC-MTB.

Text Box: Table of Contents Part A. General
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9. Purpose ..................................................................................................................................... 1

Nature of Changes - Current Year (Tax Year 2007)......................................... .................................................................................................................................................. 2
Where to File and How to Contact the IRS, Enterprise Computing Center –

Martinsburg................................................................................................................................. 3

Filing Requirements...................................................................................................................... 5

Vendor List ................................................................................................................................. 6

Form 4419, Application for Filing Information Returns Electronically...................................................... .................................................................................................................................................. 6

Filing of Information Returns Magnetically and Retention Requirements.............................................. 7

Due Dates................................................................................................................................... 8

Replacement Tape Cartridges ....................................................................................................... 9

Section 10. Corrected Returns ......................................................................................... 10

Section 11. Effect on Paper Returns and Statements to Recipients ....................................... 15

Section 12. Combined Federal/State Filing Program . 16

Section 13. Penalties Associated with Information Returns ................................................... 18

Section 14. State Abbreviations ....................................................................................... ..19

Section 15. Major Problems Encountered........................................................................... 20

Part B. Electronic Filing Specifications

Section 1. General........................................................................................................... 22

Section 2. Advantages of Filing Electronically ...................................................................... 22

Section 3. Electronic Filing Approval Procedure ...................................................................... ..................................................................................................................................... 22

Section 4. Test Files ........................................................................................................ 23

Section 5. Electronic Submissions ...................................................................................... 23

Section 6. PIN Requirements ........................................................................................... 24

Section 7. Electronic Filing Specifications ............................................................................ 24

Section 8. Connecting to the FIRE System.......................................................................... 25

Section 9. Common Problems and Questions Associated with Electronic Filing ........................ 27

Part C. Tape Cartridge Filing Specifications

Part D. Record Format Specifications and Record Layouts

Section 1. General .......................................................................................................... 29

Section 2. Transmitter "T" Record - General Field Descriptions ............................................. 29

Section 3. Transmitter "T" Record - Record Layout ............................................................ .33

Section 4. Payer "A" Record - General Field Descriptions ......................................................... ..................................................................................................................................... 34

Section 5. Payer "A" Record - Record Layout...................................................................... .47

Section 6. Payee "B" Record - General Field Descriptions and Record Layouts ....................... .48

(l) Payee "B" Record - Record Layout Positions 544-750 for Form 1098 .......... 57

(2) Payee "B" Record - Record Layout Positions 544-750 for Form 1098-C ..... 57

(3) Payee "B" Record - Record Layout Positions 544-750 for Form 1098-E....... 59

(4) Payee "B" Record - Record Layout Positions 544-750 for Form 1098-T ..... 60

(5) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-A....... 61

(6) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-B ..... 62

(7) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-C ..... 64

(8) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-CAP.... 65

(9) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-DIV............. 66

(10) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-G................ 67

(11) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-H................ 68

(12) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-INT............. 69

(13) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-LTC............. 70

(14) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-MISC........... 72

(15) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-OID............ 73

(16) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-PATR.......... 75

(17) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-Q................ 76

(18) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-R................ 77

(19) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-S ............... 82

(20) Payee "B" Record - Record Layout Positions 544-750 for Form 1099-SA.............. 83

(21) Payee "B" Record - Record Layout Positions 544-750 for Form 5498................... 85

(22) Payee "B" Record - Record Layout Positions 544-750 for Form 5498-ESA............. 86

(23) Payee "B" Record - Record Layout Positions 544-750 for Form 5498-SA.............. 87

(24) Payee "B" Record - Record Layout Positions 544-750 for Form W-2G.................. 87

Section 7. End of Payer "C" Record - General Field Descriptions and Record Layout.......................... 89

Section 8. State Totals "K" Record - General Field Descriptions and Record Layout........................... 91
Section

End of Transmission "F" Record

Part E. Extensions of Time and Waivers
Section	1.	General – Extensions ........................................................................	95
Section	2.	Specifications for Electronic Filing or Tape Cartridge Extensions of Time...	97
Section	3.	Record Layout - Extension of Time......................................................	97
Section	4.	Extension of Time for Recipient Copies of Information Returns .............	99
Section	5.	Form 8508, Request for Waiver From Filing Information Returns
		Electronically/Magnetically ..................................................................	100

Part A. General

Revenue Procedures are generally revised annually to reflect legislative and form changes. Comments concerning this Revenue Procedure, or suggestions for making it more helpful, can be addressed to:

Internal Revenue Service

Enterprise Computing Center - Martinsburg

Attn: Information Reporting Program

230 Murall Drive

Kearneysville, WV 25430

Sec. 1. Purpose

.01 The purpose of this Revenue Procedure is to provide the specifications for filing Forms 1098, 1099, 5498, and W-2G with IRS electronically through the IRS FIRE System or magnetically, using IBM 3480, 3490, 3490E, 3590, or 3590E tape cartridges. This Revenue Procedure must be used for the preparation of Tax Year 2007 information returns and information returns for tax years prior to 2007 filed beginning January 1, 2008. Tape cartridge files must be received by December 1, 2008 in order to be processed. After December 1, 2008 only electronic files are acceptable. Specifications for filing the following forms are contained in this Revenue Procedure.

(a) Form 1098, Mortgage Interest Statement

(b) Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes

(d) Form 1098-T, Tuition Statement

(e) Form 1099-A, Acquisition or Abandonment of Secured Property

(f) Form 1099-B, Proceeds From Broker and Barter Exchange Transactions

(g) Form 1099-C, Cancellation of Debt

(h) Form 1 099-CAP, Changes in Corporate Control and Capital Structure

(i) Form 1099-DIV, Dividends and Distributions

(j) Form 1099-G, Certain Government Payments

(k) Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments

(l) Form 1 099-INT, Interest Income

(m) Form 1099-LTC, Long-Term Care and Accelerated Death Benefits

(n) Form 1099-MISC, Miscellaneous Income

(o) Form 1 099-OID, Original Issue Discount

(p) Form 1099-PATR, Taxable Distributions Received From Cooperatives

(q) Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and 530)

(r) Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

(s) Form 1099-S, Proceeds From Real Estate Transactions

(t) Form 1 099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA

(u) Form 5498, IRA Contribution Information

(v) Form 5498-ESA, Coverdell ESA Contribution Information

(w) Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information

(x) Form W-2G, Certain Gambling Winnings

.02 All data received at IRS/ECC-MTB for processing will be given the same protection as individual income tax returns (Form 1040). IRS/ECC-MTB will process the data and determine if the records are formatted and coded according to this Revenue Procedure.

.03 Specifications for filing Forms W-2, Wage and Tax Statement, electronically are only available from the Social Security Administration (SSA). Filers can call 1-800-SSA-6270 to obtain the telephone number of the SSA Employer Service Liaison Officer for their area.

.04 IRS/ECC-MTB does not process Forms W-2. Paper and/or electronic filing of Forms W-2 must be sent to SSA. IRS/ECC-MTB does, however, process waiver requests (Form 8508) and extension of time to file requests (Form 8809) for Forms W-2 as well as requests for an extension of time to provide the employee copies of Forms W-2.

.05 Generally, the box numbers on the paper forms correspond with the amount codes used to file electronically/magnetically; however, if discrepancies occur, the instructions in this Revenue Procedure must be followed.

.06 This Revenue Procedure also provides the requirements and specifications for electronic or tape cartridge filing under the Combined Federal/State Filing Program.

.07 The following Revenue Procedures and publications provide more detailed filing procedures for certain information returns:

(a) 2007 General Instructions for Forms 1099, 1098, 5498, and W-2G and individual form instructions.

(b) Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S.

(c) Publication 1239, Specifications for Filing Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, Electronically or Magnetically

(d) Publication 1187, Specifications for Filing Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, Electronically or Magnetically

.08 This Revenue Procedure supersedes Rev. Proc. 2006-33 published as Publication 1220 (Rev. 10-2006), Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically or Magnetically.

Sec. 2. Nature of Changes-Current Year (Tax Year 2007)

.01 In this publication, all pertinent changes for Tax Year 2007 are emphasized by the use of italics. Portions of text that require special attention are in boldface text. Filers are always encouraged to read the publication in its entirety.

a. General

(1) ECC-MTB no longer accepts 31/2-inch diskettes for the filing of information returns.

(2) Tax Year 2007 will be the last year ECC-MTB accepts tape cartridges. Due to processing deadlines, tape cartridges must be received by December 1, 2008 in order to be processed for the current year. After December 1, 2008 the only acceptable method of filing information returns with ECC-MTB will be electronically through the FIRE System.

(3) Test procedures have been eliminated from Part A since tape cartridges will not be acceptable after December 1, 2008. Electronic filing specifications, Part B, Sec. 4 details testing procedures for electronic files.

(4) Form 8809, Application for an Extension of Time to File Information Returns, is available as a fill-in form on the FIRE System and is highly encouraged in lieu of the paper Form 8809. (See Part E, Sec. 1.)

.02 Programming Changes a. Programming Changes - Transmitter "T" Record

(1) For all Forms, Payment Year, Field Positions 2 – 5, must be incremented to update the four-digit reporting year (2006 to 2007), unless reporting prior year data.

b. Programming Changes - Payer "A" Record

(1) For all Forms, Payment Year, Field Positions 2 – 5, must be incremented to update the four-digit reporting year (2006 to 2007), unless reporting prior year data.

(2) For Form 1098, Amount Code 4 was changed to Mortgage Insurance Premiums. Amount Code 5 was added for Filer’s Use.

(3) Three fields were deleted from the Payer ‘A’ Record and are no longer required. The deleted fields are Original File Indicator, position 48, Replacement File Indicator, position 49, and Correction File Indicator, position 50. Positions 48-50 are now blank.

c. Programming Changes - Payee "B" Record

(1) For all Forms, Payment Year, Field Positions 2 – 5, must be incremented to update the four-digit reporting year (2006 to 2007), unless reporting prior year data.

(2) Form 1098-T, Method of Reporting Indicator, position 550, was simplified. A single indicator of ‘1’ is used to indicate if the method of reporting changed from the previous year. A blank indicates no change occurred.

(3) Form 1099-R, Date of Designated Roth Contribution, position 552-559, changed to First Year of Designated Roth Contribution, positions 552-555. Only the year of the first Roth contribution is required not the complete date.

(4) For Form 1099-R , Distribution Code ‘B’ may now be used with codes ‘P’ and ‘4’. (5) The state of Utah, state code 49, was added to the Combined Federal/State Filing Program. See Part A, Sec. 12 for the Participating States and Their Codes table.

Sec. 3. Where To File and How to Contact the IRS, Enterprise Computing Center - Martinsburg

.01 All information returns filed electronically or magnetically are processed at IRS/ECC-MTB. Files containing information returns and requests for IRS electronic and tape cartridge filing information should be sent to the following address:

IRS-Enterprise Computing Center - Martinsburg

Information Reporting Program

230 Murall Drive

Kearneysville, WV 25430

.02 All requests for an extension of time to file information returns with IRS/ECC-MTB filed on Form 8809 or request for an extension to provide recipient copies, and requests for undue hardship waivers filed on Form 8508 should be sent to the following address:

IRS-Enterprise Computing Center - Martinsburg

Information Reporting Program

Attn: Extension of Time Coordinator

240 Murall Drive

Kearneysville, WV 25430

.03 The telephone numbers for tape cartridge inquiries or electronic submissions are: Information Reporting Program Customer Service Section

TOLL-FREE 1-866-455-7438 or outside the U.S. 1-304-263-8700
email at mccirp@irs.gov

304-267-3367 - TDD
(Telecommunication Device for the Deaf)

304-264-5602 - Fax Machine

Electronic Filing – FIRE System
http://fire.irs.gov

TO OBTAIN FORMS:
1-800-TAX-FORM (1-800-829-3676)

www.irs.gov - IRS website access to forms (See Note.)

Note: Because paper forms are scanned during processing, you cannot use forms printed from the IRS website to file Form 1096, and Copy A of Forms 1098, 1099, or 5498 with the IRS.

.04 The 2007 General Instructions for Forms 1099, 1098, 5498, and W-2G are included in the Publication 1220 for your convenience. Form 1096 is used only to transmit Copy A of paper Forms 1099, 1098, 5498, and W-2G. If filing paper returns, follow the mailing instructions on Form 1096 and submit the paper returns to the appropriate IRS Service Center.

.05 Make requests for paper Forms 1096, 1098, 1099, 5498, and W-2G, and publications related to electronic/magnetic filing by calling the IRS toll-free number 1-800-TAX-FORM (1-800-829-3676) or ordering online from the IRS website at www.irs.gov.

.06 Questions pertaining to magnetic media or internet filing of Forms W-2 must be directed to the Social Security Administration (SSA). Filers can call 1-800-772-6270 to obtain the phone number of the SSA Employer Service Liaison Officer for their area.

.07 Payers should not contact IRS/ECC-MTB if they have received a penalty notice and need additional information or are requesting an abatement of the penalty. A penalty notice contains an IRS representative's name and/or telephone number for contact purposes; or the payer may be instructed to respond in writing to the address provided. IRS/ECC-MTB does not issue penalty notices and does not have the authority to abate penalties. For penalty information, refer to the Penalties section of the 2007 General Instructions for Forms 1099, 1098, 5498, and W-2G.

.08 A taxpayer or authorized representative may request a copy of a tax return, including Form W-2 filed with a return, by submitting Form 4506, Request for Copy of Tax Return, to IRS. This form may be obtained by calling 1-800-TAX-FORM (1-800-829-3676) or by downloading from the IRS website at www.irs.gov. For any questions regarding this form, call 1-800-829-1040.

.09 The Information Reporting Program Customer Service Section (IRP/CSS), located at IRS/ECC-MTB, answers electronic/tape cartridge, paper filing, and tax law questions from the payer community relating to the correct preparation and filing of business information returns (Forms 1096, 1098, 1099, 5498, 8027, and W-2G). IRP/CSS also answers questions relating to the electronic/tape cartridge filing of Forms 1042-S and the tax law criteria and paper filing instructions for Forms W-2 and W-3. Inquiries dealing with backup withholding and reasonable cause requirements due to missing and incorrect taxpayer identification numbers are also addressed by IRP/CSS. Assistance is available year-round to payers, transmitters, and employers nationwide, Monday through Friday, 8:30 a.m. to 4:30 p.m. Eastern Time, by calling toll-free 1-866-455-7438 or via email at mccirp@irs.gov. Do not include SSNs or EINs in emails or in attachments since this is not a secure line. The Telecommunications Device for the Deaf (TDD) toll number is 304-267-3367. Call as soon as questions arise to avoid the busy filing seasons at the end of January and February. Recipients of information returns (payees) should continue to contact 1-800-829-1040 with any questions on how to report the information returns data on their tax returns.