AccessibilitySkip to Top NavigationSkip to Main ContentHome  |  Contact IRS  |  About IRS  |  Site Map  |  Español  |  Help  

Part 3. Submission Processing

Chapter 10. Campus Mail and Work Control

Section 8. Information Returns Processing

3.10.8  Information Returns Processing

3.10.8.1  (01-01-2008)
Purpose

  1. These instructions cover receipt and control processing of the following domestic and foreign information returns:

    • Forms 1096, Annual Summary and Transmittal of U.S. Information Returns and 8487, Entity Change Entry, processed to the Payer Master File

    • Forms 1098 (Series)

    • Forms 1099 (Series)

    • Forms W-2G, Certain Gambling Winnings

    • Forms 5498 (Series)

  2. The instructions for processing Forms W–2, W–2C,W-2P, W–3 and W–3C consist solely of procedures for routing and disposal of these forms.

  3. Instructions in IRM 3.10.72, Extraction, Sorting and Numbering should be used as a source of general guidelines not found in this IRM.

3.10.8.1.1  (01-01-2008)
Scope

  1. These instructions apply to all campuses except for the instructions that pertain to SCRIPS processing.

3.10.8.1.2  (01-01-2008)
Program Codes

  1. Use the following program codes as appropriate:



    Return     		Program
    Code
    ISRP Forms 1096 44310
    Forms 1098 Series 44312
    Forms 1099-A 44309
    Forms 1099–B 44301
    Forms 1099-C, 1099-CAP, 1099-G 44303
    Forms 1099-DIV 44302
    Forms 1099-H, 1099-INT, 1099-LTC, 1099-SA 44300
    Forms 1099–MISC 44305
    Forms 1099-OID 44304
    Forms 1099-PATR 44307
    Forms 1099-Q, 1099-S 44308
    Forms 1000-R 44306
    Forms 5498, Forms 5498-ESA 44313
    Forms 5498-SA 44315
    Forms W-2G 44314
    SCRIPS Forms 1096, 1098 Series, 1099 Series and 5498 44340
    Foreign Information Returns 44320
    Form 8487 44620

3.10.8.1.3  (01-01-2008)
Definitions

  1. Account Type Code—a code in the Block Header Record (Form 1332 or Form 3893) distinguishing the entity or selection category of the return(s) in that block.

  2. Change of Payer—any point in a block of returns at which any part of the Payer Filer entity changes.

  3. Copy A—Forms 1098 (Series), 1099 (Series), 5498 (Series) should be in the correct scannable format, ink color, and tax year being processed. Copy A is the copy of the form which is submitted to the Service for processing. These forms can be separated into four categories:

    Scannable The scanner can read all or most of the information printed on the forms.
    Non-Scannable The scanner cannot read any information on the forms, but the forms can be passed through the scanner's transport for the generation and imprinting of DLNs on the forms.
    Non-Transportable The scanner cannot accept these forms because they are cut, torn, or mutilated.
    Unprocessable These documents cannot be processed at all because the information is unclear, indecipherable, or the utility of the document is minimized or eliminated.

    Note:

    Forms 1096 have only one copy. They should be in the correct scannable format, ink color and tax year being processed. However, photocopies of Forms 1096 are considered processable. Current tax year Forms 1096 transmitting prior year information returns may require correspondence if the tax year to which the information pertains is not clear.

  4. Corrected Return- Return with X marked in the corrected box at the top of the form or the word corrected or amended is written on the information return.

  5. Domestic Payer Return—any information return submitted on an official IRS information return or an approved substitute not meeting the definition for a Foreign Treaty Information Return.

  6. Foreign Payer—any payer filing Foreign Treaty Information Returns.

  7. Foreign Treaty Information Return—any information return furnished by foreign governments, businesses, or individuals to the Internal Revenue Service to report amounts paid to businesses or individuals claiming U.S. residence. These returns will not be submitted on official IRS information return forms that are processed in the normal domestic IRP.

  8. Parent Return—the return which transmits the related information returns. The payer entity on the parent return must agree with the payer entity on the forms they transmit (abbreviations of names are considered the same, but the TIN must be an exact match).

    Parent Return Information Return
    Form 1096 Form W–2G, 1098 (Series), Form 1099 (Series), Form 5498 Series
    Form W–3 Form W–2
    Form W–3C Form W–2C

  9. Payer—Generally, payer information is found in the upper portion of IRP documents. A payer may be identified on forms as one or more of the following: Fiduciary, Estate, Trust, Partnership, Corporation, Employer, Payer, Trustee, Issuer, Filer, Lender or Borrower. For Form 1098, Borrower / Payer means Payee.

  10. Payee—Generally, payee information is found in the lower portion of IRP documents. A payee may be identified on forms as one or more of the following: Beneficiary, Partner, Shareholder, Employee, Recipient, Participant, Winner, Transferor or Lender.

    1. Form 1098, Recipient/Lender means Payer

    2. Form 1096 does not contain payee information.

  11. Payer Identifier—a gummed label placed on the information return to signify a change of payer. It is used to alert ISRP to a change of payer and to accurately determine payer counts. Payer Identifiers may be attached by Receipt and Control or Document Perfection at the discretion of campus management. Forms 1096 will be used in lieu of a gummed label for scannable forms.

  12. Single Return Payer—any Payer for whom only one return is selected through the Detail Sort. All Single Return Payers should be combined and batched separately to eliminate the need for Payer Identifiers. This does not apply to scannable returns.

  13. TIN—Taxpayer Identification Number, either SSN (Social Security Number or EIN (Employer Identification Number).

  14. Correspondence indicators — a two digit number which, if applicable, is coded on the Form 1096 to generate letters to filers who did not file correctly. These indicators also post to the Payer Master File (PMF) to establish a history of the filer.

  15. Prior year return—a return which reports information that does not pertain to the tax year currently being processed (calendar year minus one). The Service does not process prior year Forms 1099 (Series), 1098 (Series), 5498 (Series), however, the Service does process certain prior year Forms 1096.

  16. Late filing indicator—a character placed in the first box under the title "For Official Use Only" on the Form 1096. This indicator will post to the PMF for use in generating a late-filing notice to the payer.

3.10.8.2  (01-01-2008)
Inspection Of Contents

  1. Dispose of all information returns not mentioned in IRM 3.10.8.2, Inspection of Contents, and IRM 3.10.8.3, Detailed Sorting. Management must review all original forms (not copies) before disposal.

  2. Forms 1099 are to be processed in accordance with Records Control Schedule 206, Campuses, of IRM 1.15.2 – Chapter 15, Types of Records and Their Life Cycles. Apply the disposition instructions for Forms 1099.

  3. Process Form 1098 (Series), Forms 1099 (Series), Forms 5498 (Series) and Forms 1096 according to instructions for each type of return in IRM 3.10.8.3.

  4. If the Form 1096 has a money amount entered in box 5, correspond or call the taxpayer requesting the Forms 1099 that should have been attached to the Form 1096 and the correct box to mark in the type of form section.

  5. If there is no money amount entered in Box 5, mark the "Miscellaneous" box in the type of form section and process. The taxpayer does not want the forms sent to them any longer. This will accomplish the need to delete their name from the mailing list.

  6. Forms 1096 that were submitted individually, without payee Forms 1099 (Series), 1098 (Series), 5498 (Series) or W–2G, or were disassociated from their respective information returns during IRP processing, must be processed through ISRP. Box 3, Total number of Documents, should be coded zero on these Forms 1096.

  7. Attempt to associate Form 1096 with disassociated payee forms before sending to ISRP.

  8. Forms 1096 transmitting only voided information returns will not be processed.

  9. Route any Form 8210, Self-Assessed Penalties Return, to the unit that assesses and abates IRP penalties.

  10. Correspondence received attached to information returns should be routed as follows:

    1. Correspondence concerning an incorrect information return will be routed as follows:

      From Payer Correspond using Letter 1865(C). Use fill-in paragraph that instructs the payer to file corrected return(s).
      From the Payee Route to Accounts Management branch for analysis and disposition.

    2. When corrected information returns are attached to the correspondence, forward to Correspondence unit to determine if the information returns require processing. If it is determined the information returns require processing, they will be detached from the correspondence and forwarded for processing. Notate on the correspondence that the information returns were detached and sent to be processed.

  11. Filers of information returns may attach correspondence with their submissions to explain why taxpayer identification numbers were not provided on some or all of their information returns. When this type of correspondence is identified, respond to the filer on IDRS Correspondex Letter. After a response has been issued, dispose of the incoming correspondence.

3.10.8.2.1  (01-01-2008)
General Correspondence

  1. Correspondence meeting Taxpayer Advocate Service Criteria will be routed per IRM 3.0.273.12.6.

  2. Correspondence concerning other than information returns will be routed to the Accounts Management for review to determine appropriate routing of the taxpayer correspondence.

  3. Correspondence concerning 50 or more recipient accounts being in error will be routed to the Payor Coordinator in the Underreporter Branch, Ogden Compliance Center.

  4. Correspondence concerning a CP 2000 notice. See IRM 3.10.72 for instructions.

  5. Correspondence concerning current year W–2 or W–3 will be forwarded to SSA. Correspondence concerning prior year Form W-2 / W-3, should be forwarded to the CAWR function.

  6. When a letter or notice from the CAWR Reconciliation Function is received from the taxpayer, the correspondence, as well as any forms or information submitted with it, should be sent to the CAWR Function. Do not remove any of the information or forms (94X, Sch H, 1096, 1099–R, W-2G, W-2, or W-3) submitted with the CAWR letter or notice received from the taxpayer.

3.10.8.2.2  (01-01-2008)
CP 15 or CP215

  1. If information returns have a CP 15 or 215 attached and the information returns are processable do the following:

    1. Code Delinquent Return Indicator "N" on the Form 1096. Do not code a received date.

    2. Remove the information returns and send for regular processing.

    3. Notate on the CP 15 or 215 "Processable returns submitted" , the date received and the number of processable documents.

    4. Send the CP 15 or 215 to the appropriate area for further action on any returns (Forms 941X, Sch H W-2, or W-3) remaining with the notice.

3.10.8.2.3  (01-01-2008)
Prior Year Forms

  1. All prior year Forms 1096 must be date stamped upon receipt.

  2. Forward all prior year Forms 1096 marked "PENALTY CONSIDERED" to the Code and Edit function. Do not code the Delinquent Indicator or received date on these Forms 1096; a penalty assessment has already been considered.

  3. Process prior year Forms 1096 marked "Reasonable cause or due diligence was exercised" or "Information returns were unprocessable—PMF only" as timely filed returns.

  4. Prior year 1099R and W-2G will be processed as follows:

    1. Send prior year Forms W–2G with correspondence only if an amount is reported for Federal Income Tax Withheld to the CAWR Reconciliation function.

    2. Prior year W–2G that have an amount for "income tax withheld" will be sent to the CAWR Reconciliation function along with a photocopy of the associated Form 1096. The original Form 1096 will be processed according to IRM 3.10.8.2.1.

    3. Prior year W–2G that have no amount for "income tax withheld" will be destroyed. Process the Form 1096 according to IRM 3.10.8.2.1.

    4. Prior year 1099–R will be sent to the CAWR Reconciliation function if an amount is present in Box 4 (Federal Income Tax Withheld). Route them after Form 1096 has been properly coded for processing.

    5. Destroy all prior year 1099–R unless CAWR related correspondence is attached. If there is CAWR correspondence attached, send to CAWR with the Form 1096.

3.10.8.2.4  (01-01-2008)
Date Stamping Late Filed Forms 1096

  1. All current year Forms 1096 transmitting Forms 1098, 1099 or W–2G received after March 15 must be date stamped upon receipt. Do not date stamp Forms 1096 transmitting Forms 5498, 5498–SA, 1099–G or 1099–R. Follow general guidelines found in IRM 3.10.72 for date stamping late-filed returns.

    1. Date stamp current year Form 1096 in the blank area above the wording "For Official Use Only" . The date stamp must not cover the fill-in boxes.

    2. In the first box under the wording "For Official Use Only" , code an "X" with a #2 pencil.

    3. When a reply to Letter 1865(C) is received, use date stamp, if present, on the original return.

    4. Do not date stamp a return when the original was unprocessable, but timely filed.

  2. Some Forms 1096, even though received late, should not be date stamped or coded. The conditions for which a Form 1096 will not be date stamped or coded are given below:

    1. Forms 1096 that transmit Forms 1099–G, Forms 5498, Forms 5498–SA or Forms 1099–R.

    2. Forms 1096 that were incorrectly sent to state taxing agencies or the Social Security Administration (SSA). The envelopes will show that the state agency or SSA sent the forms to us. However, if the original receiving location either stamped a received date indicating a late filing, or forwarded the original mailing envelope which indicated a late filing, accept the transmittal as late filed and follow the instructions in IRM 3.10.8.2.1(1 ) above.

    3. Forms 1096 that have been coded A, C, N or E on the top center of the Form, or the Delinquent Indicator box.

    4. Forms 1096 that are received with no Forms 1099, 1098, 5498, 5498–SA or W–2G.

    5. See IRM 3.10.72 for additional guidelines on determining timeliness.

  3. If a payer sent in a letter explaining why the returns are late, date stamp the Form 1096 and forward to the IRP Unit for processing through SCRIPS or ISRP.

  4. Delinquent current year Forms 1096 received too late to be processed in the current processing year will be held until ISRP startup for the next year IRP program.

  5. Late filed Forms W–3 transmitting Form W–2 must also be date stamped. If Forms W–2 are received with a Form W–3, date stamp the first Form W–2 in the submissions. See IRM 3.10.8.2.2.

  6. For Form 1099–DIV submissions that are received late and only have information reported in Boxes 5 and/or 6, DO NOT place a late filing indicator or received date on Forms 1096.

3.10.8.2.5  (01-01-2008)
Forms W–2, Forms W–2C, Forms W–3 and Forms W–3C

  1. Forms W–2, W–2C, W–3 and W–3C will be processed as follows:

    1. Any current tax year copy received, will be sent to the SSA address listed below.

    2. All future tax year copies will be sent to the SSA address listed below.

    3. Any copy of prior year returns will be routed to the CAWR Reconciliation Function. Cases should be routed in accordance with the Campus Program Locator Guide. The Guide can be found on SERP under Who/Where. http://serp.enterprise.irs.gov/databases/who-where.dr/transshipment.dr/campus_locator_guide.2006.doc.

  2. SSA Address- Send Copy A of Forms W-2, W-2C, and W-3 for payers to

    Social Security Administration
    Wilkes-Barre Data Operations Center
    Wilkes-Barre, PA 18769

  3. Copies A of Forms W–2GU (Guam), Forms W–2VI (Virgin Islands), and W–2NMI (North Mariana Islands) are not for IRS use. The transmittal for Forms W–2GU, W–2VI and W–2NMI is Form W–3SS. Send to:

    Social Security Administration
    Wilkes-Barre Data Operations Center
    Wilkes-Barre, PA 18769

  4. Copies A of Forms W–2AS (American Samoa), are not for IRS use. The transmittal form for Form W–2AS is Form W–3SS. Send to:

    American Samoan Tax Office
    Government of American Samoa
    Pago Pago, AS 96799

  5. Ensure that the payer's submission remains intact (Form W–3 with related Forms W–2 (Copy A)), whether the submission is sent to SSA or the CAWR Reconciliation Function (as outlined in IRM 3.10.8.2). Do not staple Form W–3 to related Forms W–2. Put the payer submission back into the original envelope/container that the records were received in.

  6. Ship documents in accordance with IRM 3.13.62, Media Transport and Control. Prepare Transmittal Form 3210 using actual document count for Forms W–3 and an estimated document count for Forms W–2. Ship documents on a weekly basis. SSA is required to acknowledge receipt.

  7. Ship late-filed Forms W–3 and W–2 separately from those that were timely filed. Annotate on the Form 3210 "Delinquent Returns" .

  8. Forms W–3, and W–2 that are received for subsequent tax years will be forwarded to SSA.

  9. In every instance when we forward returns to Social Security Administration (SSA), Letter 1306(c) must be sent informing the taxpayer that we forwarded the forms to SSA and in the future the forms should be sent directly to SSA (unless otherwise directed by correspondence issued by us.

3.10.8.3  (01-01-2008)
Detailed Sorting

  1. Returns must be reviewed within 30 days of receipt to allow timely correspondence with the filer of unprocessable returns. This will allow the filer time to obtain and prepare the proper forms to re-file.

  2. Sort returns by return type and tax year. The Form 1096 should remain with the returns it is transmitting.

  3. Succeeding year returns must be held for inclusion with returns received for that succeeding year, including Forms 1096.

    1. Some regulations allow filers to file information returns on a transactional basis.

    2. Volume counts of receipts of information returns received in processing year 2007 must be maintained for years 2004 through 2006.

  4. Each return type (i.e., 1098, 1099–INT, 1099–DIV) must have its own transmittal document.

  5. The following forms are processed through SCRIPS.

    • Form 1096, Annual Summary and Transmittal of U.S. Information Returns

    • Forms 1098, Mortgage Interest Statement

    • Forms 1098–E, Student/Loan Interest Statement

    • Forms 1098–T, Tuition Payments Statement

    • Forms 1099–A, Acquisition or Abandonment of Secured Property

    • Forms 1099–B, Proceeds from Broker and Barter Exchange Transactions

    • Forms 1099–C, Cancellation of Debt

    • Forms 1099–DIV, Dividends and Distributions

    • Forms 1099–G, Certain Government Payments

    • Forms 1099–H, Health Insurance Advance Payments

    • Forms 1099–INT, Interest Income

    • Forms 1099–LTC, Long Term Care and Accelerated Death Benefits

    • Forms 1099–MISC, Miscellaneous Income

    • Forms 1099–OID, Original Issue Discount

    • Forms 1099–PATR, Taxable Distributions Received from Cooperatives

    • Forms 1099–Q, Qualified Tuition Program Payments

    • Forms 1099–R, Total Distributions from Profit-Sharing, Retirement Plans, Individual Retirement Arrangements, Insurance Contracts, etc.

    • Forms 1099–S, Proceeds from Real Estate Transactions

    • Forms 5498, Individual Retirement Arrangement Information

  6. The following forms require ISRP processing:

    • Form 1098–C, Contributions of Motor Vehicles, Boats, and Airplanes

    • Form 1099–CAP, Changes in Corporate Control and Capital Structure

    • Forms 1099–SA, Distribution from Medical Savings Account

    • Forms 5498–ESA, Coverdell ESA Contribution Information

    • Forms 5498–SA, Medical Savings Account Information

    • Forms W–2G, Certain Gambling Winnings

    • Form 8487, Entity Change Entry

    • Prior year, Forms 1096

  7. It is not necessary to separate returns with payee TINs from returns without payee TINs.

  8. Copies B & C of Forms 1098 (Series), 1099 (Series), 5498 (Series), received in the campus with a Form 1096 will be treated as Copy A.

    1. Process the returns as you would Copy A.

    2. If Copy B and/or Copy C are received reporting the same information, dispose of one of the copies.

    3. Code the Form 1096 using the appropriate correspondence indicator.

    4. Dispose of all Copies B & C received without a Form 1096. If other than Copies A are received without a Form 1096 but with correspondence indicating that it is an intended submission, prepare a Form 1096 (see IRM 3.10.8.4.1) and process the forms as Copies A.

    5. If Copy A is received with a Form 1096 and a state transmittal, process the submission and destroy the state transmittal.

    6. Destroy all copies B, C, Copy 1 or 2, or any copy designated for a state received without a Form 1096 or a state transmittal.

    7. Process as Copy A all forms designated for the state (e.g., copy 2, Copy S) received with a Form 1096.

    8. Forward to the appropriate state office all copies designated as state copies received with a state transmittal, per instructions in IRM 3.10.72.

  9. Void all Forms 1099, 1098, 5498, 5498–ESA and 5498–SA which do not have a money amount over $1.00 by placing an "X" with a #2 pencil in the void box at the top of the return. This procedure does not apply to:

    1. Forms 1099–R with cents only in Box 4 and

    2. Forms 1099–MISC with a mark in box 9, and

    3. Corrected Returns

  10. Dispose of all submissions that contain only voided documents. This includes submissions voided by IRS based on instructions in IRM 3.10.8.4.3. Managerial review is required prior to disposing of a voided submission.

  11. See IRM 3.10.8.2.1 for processing returns received after March 15.

3.10.8.3.1  (01-01-2008)
Detailed Sorting for SCRIPS Processing

  1. Only current year Forms 1096, 1098 (Series), 1099 (Series), and 5498 will be processed through SCRIPS .

    Note:

    The following forms will not be processed on SCRIPS: Forms 1098–C, 1099–CAP, 1099-LTC, 1099–SA, 5498–ESA, 5498–SA, and W-2G's..

  2. Forms 1096 that are to be processed through SCRIPS must remain with the returns they transmit.

3.10.8.3.2  (01-01-2008)
Scannable Payer Submissions

  1. Official IRS forms were used or an identical substitute

  2. The information is typewritten or machine-printed within the parameters of any given field. Some returns may be received with all data typed or printed except that the payer data is stamped or handwritten. This will not make the returns non-scannable.

  3. Three information documents on a single page (two per page for Form 1099-B, Form 1099-DIV, Form 1099–MISC and Form 1099–R), not cut or separated, and one document per page for Form 1096.

  4. If the returns meet the above criteria, disregard the following conditions:

    1. Returns are not burst and stripped. If they are not, burst and strip the returns.

    2. Returns with typographical errors which have or have not been corrected in scan lines or those with handwritten money amounts will be treated as scannable.

    3. One of the documents on the page is in error and the payer has crossed the document out rather than using the void box with a #2 pencil. Do not mark the Form in any other manner.

    4. Returns which have been stapled are scannable. Carefully remove all staples and be sure not to tear or rip the information returns. Never staple information returns.

    5. Returns which have asterisks or other indicators in the money amounts are scannable.

3.10.8.3.3  (01-01-2008)
Non-scannable

  1. The information is printed legibly but cannot be read by the scanner.

  2. Consult the SCRIPS unit to clarify what can be read by the scanner.

  3. All non-scannable forms which are not torn, cut or separated may be physically fed through the scanner for processing.

3.10.8.3.4  (01-01-2008)
Non-transportable

  1. Non-transportable documents are those that are torn, cut or separated, or for any other reason will not be acceptable for processing by the scanner.

    1. Non-transportable forms must be photocopied. The photocopies can be processed through the scanner.

    2. Some campuses may elect to process non-transportable information returns through ISRP.

3.10.8.3.5  (01-01-2008)
Detailed Sorting of Forms 1096, 1098 (Series), 1099 (Series), W–2G, and 5498 (Series)

  1. Prior year Forms 1096 will processed through ISRP.

  2. Do not dispose of the Forms 1098 (series), 1099 (series), 5498 (series) and the Form 1096 transmitted if the information returns are current year.

  3. When only one return is received for a payer, place the return in a group of single payer returns. Do this only for current year information returns.

  4. When more than one return is received for a payer place the returns in a group of multiple payer returns. Do this only for current year information returns.

  5. Sort current returns by type of return making sure that the first return for each payer contains the correct payer name and TIN.

  6. Any information return that is to be processed through ISRP must be numbered and batched.

    1. Each current tax year information return must contain the DLN of the Form 1096 it was transmitted with

    2. Dispose of prior year information returns (except Forms 1099–R or W–2G with an amount reported in Federal Income Tax Withheld) after the transmitting Form 1096 has been coded.

3.10.8.3.6  (01-01-2008)
Detailed Sorting for SCRIPS Processing

  1. Only current year Forms 1096, 1099 (Series), 1098 (Series), and 5498 will be processed through SCRIPS.

  2. Forms 1096 that are to be processed through SCRIPS must remain with the returns they transmit.

  3. Sort returns by the categories of transportable and non-transportable. Centers are not required to sort the documents sent to SCRIPS by Form type.

  4. Transportable returns are those that are not torn, cut, or separated and can be physically sent through the scanner.

    1. Burst and strip continuous roll/printed returns if necessary.

    2. Carefully remove staples, never staple documents together.

    3. Tape a cut/torn document if it will make it transportable.

  5. Non-transportable return is one that is torn, cut separated, inappropriate size, or for any other reason will not be acceptable for processing through the scanner. Non-Transportable Forms 1096 must be photocopied. The photocopies will be imaged through the scanner and the images archived.

3.10.8.3.7  (01-01-2008)
Detailed Sorting Forms 1096, Forms 1099–R and Forms W–2G for CAWR Reconciliation

  1. Forms 1096, W–2G and 1099–R for Prior year will be processed for CAWR Reconciliation.

  2. If the entire payer's submission is for a subsequent tax year, hold the entire submission for the appropriate processing year.

  3. See IRM 3.10.8.2.1 for processing Forms 1096 and W–2G filed after March 16.

  4. Forms 1096 and Forms W–2G are sorted as follows:

    1. If the Date Won (Box 4) on a current Forms W–2G reflects a prior tax years winnings, pull those documents. Annotate on the back of the related Form 1096, the number of Forms W–2G that have been pulled from the payer's submission. Forward the pulled Forms W–2G to the CAWR Reconciliation Function. Provide Reconciliation an explanation as to why these documents were pulled from the payer's submission.

    2. If the Date Won (Box 4) on a current W–2G reflects subsequent tax year(s) winnings, pull those documents. Annotate on the back of the related Form 1096, the number of Forms W–2G that have been pulled from the payer's submission. Hold those pulled Forms W–2G for the appropriate processing year (creating a "Dummy" Form 1096 in the appropriate processing year). Forward the Form 1096 and remaining Forms W–2G for ISRP processing.

3.10.8.4  (01-01-2008)
Review General

  1. Retain the information returns grouped by Payer (Parent) within Type of Return, within Tax Year.

  2. Burst and strip the returns if necessary

  3. All staples, paper clips, etc., must be removed from the information returns.

  4. Returns secured by Examination or Collection may have an A, C, E, or N edited in the top center of the form, or the Delinquent Indicator box on Form 1096. These codes are correct and should be left on the returns. Do not code a received date if either of these codes are present.

3.10.8.4.1  (01-01-2008)
Review of Parent Document

  1. Cross check the information returns against their parent returns to determine if all necessary information is present and that it matches.

  2. For Payer TIN:

    1. Only one Payer TIN should be present

    2. If more than one TIN is present, see IRM 3.10.8.4.1(5) below.

  3. For Payer Name:

    1. Only one Payer Name should be present

    2. If more than one name is present, see IRM 3.10.8.4.1(5) below.

  4. If all necessary information is not on the returns, but can be determined from the parent return, other returns from the same payer, or any attached correspondence, edit the necessary information

  5. If Payer TIN only is missing and cannot be determined by cross checking other documents follow research procedures to obtain a TIN.

    1. If a Payer TIN is found, edit it to the Form 1096 and first Form W–2G, 1098, 1099, 5498, 5498–ESA, and 5498–SA.

    2. If a Payer TIN is not found, leave blank and continue normal processing.

  6. If Payer Name only is missing, and cannot be determined by cross checking other documents, follow research procedures to obtain a Name.

    1. If a Payer Name is found, edit it to the Form 1096 and first Form W–2G, 1098, 1099, 5498, 5498–ESA or 5498–SA.

    2. If a Payer Name is not found and there is a return address, try corresponding using the address. If there is no return address, dispose of the information returns and transmittals.

    3. For Forms 1099–R, Forms W–2G and their transmittal Forms 1096, use "Unknown" as the Payer Name, if one cannot be found.

  7. If multiple Payer Names and/or Payer TINs appear, check attachments to determine which Payer name and/or TIN should be used. If the correct Payer name and/or TIN cannot be determined, follow research procedures to determine the correct name to be used for the TIN. Underline the first Payer Name and TIN listed on the first return for that payer and also on its parent Form 1096. Also issue Letter 586 advising which name and number we used.

  8. To assure processing of only valid Forms 1098, do the following:

    1. Compare the "Filer's" name on the Form 1096 to that of the "Recipient's/Lender's" on the Forms 1098.

    2. Compare the "Filer's" TIN on the Form 1096 to that of the "Recipient's/Lender's" on the Forms 1098.

  9. The information processed on the Form 1096 is as follows:

    Name of Payer Make sure that the payer name being used for the Forms 1098 / 1099 /5498/ 5498–ESA / 5498–SA / W–2G and the Form 1096 is the same.
    Address of Payer Make sure the address is present. If not present, it may be copied from the Form 1098 /1099 / 5498 / 5498–ESA / 5498–SA / W–2G payer address.
    Payer TIN Make sure that the payer TIN used for the Forms 1098 / 1099 / 5498/ 5498–ESA / 5498–SA / W–2G the Form 1096 transmitted.
    Type of Form 1098 / 1099 / 5498 / 5498–ESA / 5498–SA / W–2G the Form A Form 1096 can transmit only one type information return per filing
    1096 transmitted. If the Form 1096 transmitted more than one type of Form, create an additional Form 1096 so that one Form 1096 exists for each type of information return.
      Ensure that the Form type checked on the Form 1096 matches the Form type being transmitted. If it doesn't, correct the Form 1096.
    Annotate any Form 1096 that was created by the Service with "Prepared by IRS" on the signature line. All Service Created Forms 1096 must be written/printed legibly. Centers may use the standard abbreviation provided in Exhibits in Processing Reference Guide when creating Forms 1096. These abbreviations should not be used when the name control would be affected. Major City codes as shown in Document 7475 (Rev. 1–92) may also be used.

    Assign correspondence indicator 99 if IRS created the Form 1096 and there are no problems with the associated information returns.
    Total number of documents, Box 3 All Forms 1096 transmitting Form W–2G, all prior year Forms 1096, and all Forms 1096 to be processed through ISRP must have an entry in Box 3.

    See IRM 3.11.8, Campus Returns and Document Analysis

    Do not verify Box 3 on Form 1096 if the document is to be processed through SCRIPS. The scanner system will compute the number of documents the Form 1096 transmitted and will place that count in the respective field.
    Code the Form 1096 with the appropriate Correspondence Indicator. See IRM 3.10.8.4.6.  

3.10.8.4.2  (01-01-2008)
Review of Information Returns

  1. In order to ensure that the returns are correctly transmitted and are in valid, processable formats, review each payer's returns.

    1. If any of the conditions cited below apply to the returns (or schedules) and the necessary information cannot be determined from the returns or from the Transmittal, consider the returns temporarily unprocessable.

    2. The following conditions make a return temporarily unprocessable and require correspondence.

    Temporarily Unprocessable Return requiring correspondence Type of return cannot be determined.
      Kind of amount cannot be determined.
      Amount of money within an Amount Field cannot be determined (e.g. the decimal point is incorrectly placed).
      Return is in a very divergent format (i.e., does not look like the official form and would impede processing).
      Tax year to which the information pertains cannot be determined.
      The information is printed in such a manner that the returns cannot be separated for processing (e.g. a computer listing).
      Real estate transactions are reported on a Form other than the official Form 1099–S or, the filers name is inconsistent throughout the submission and/or the filers name on Form 1096 does not match the filers name on Forms 1099–S.

  2. If the payment type can be identified as belonging on a Form W–2 rather than Form 1099 (see examples below), send the documents back to the payer using Letter 1306(C). They should be filed with SSA as Forms W–2. The following items should be reported on Form W–2:

    • Christmas bonuses

    • Reimbursements for travel and car expenses (valid entry in 1099-MISC, Box 7, for non-employee

    • Wages

    • Other employee compensation

    • Tips

    • Vacation allowances

    • Severance Pay

    • Moving Expenses payments

    • Third party payments for sick leave

    • Advanced earned income credit (EIC) payments

    • Withheld income tax (when included on Form with income types listed above)

    • Withheld FICA tax

    • Do not correspond if the information return is reporting income for a minister, priest, or a person authorized to conduct religious worship.

  3. If a Payer sends in Form 1099 with all kinds of income listed on a single form (i.e., dividends, interest, rents, royalties, etc. on the same form), pull the return and contact the payer using Letter 1865(C) or (SC).

  4. A return should contain a Payee name, a Payee TIN and/or a mailable address. Unknown Payer Names are no longer acceptable (except for Forms 1099R and W–2G). The following IDRS command codes may be used to assist in research: INOLE, PMFOL.

  5. Returns selected for IRP processing must contain an amount in at least one specified payment field with the exception of corrected/amended returns. If the returns does not meet the criteria specified below, void the return by placing an "X" with a #2 pencil in the void box.

    1. The following chart shows the significant payments fields and minimum amount by type of return.

            (AUSC only)
      Type of Payment Amount Minimum Amount
      Return Fields Domestic Foreign
      1098 1, 2, 3 1.00 N/A
      1098–C 4c 1.00 N/A
      1098–E 1 1.00 N/A
      1098–T 1, 2, 4, 5, 6, 10 1.00 N/A
      1099–A 2, 4 1.00 N/A
      *1099–B 2, 3, 4, 8, 9, 10, 11 1.00 1.00