- Highlights of This Issue
- Part I. Rulings and Decisions Under the Internal Revenue Code of 1986
- Part III. Administrative, Procedural, and Miscellaneous
- Part IV. Items of General Interest
- Definition of Terms and Abbreviations
- Numerical Finding List
- Effect of Current Actions on Previously Published Items
- How to get the Internal Revenue Bulletin
Internal Revenue Bulletin: 2004-41
October 12, 2004
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.
Federal rates ; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2004.
This notice describes the transition period for purposes of sections 7702 and 7702A of the Code from the 1980 Commissioners Standard Ordinary mortality tables (CSO tables) to the 2001 CSO tables that are to be used by issuers of life insurance products. Notice 88-128 supplemented.
This notice announces that the Service will not assert penalties for failure to report, under section 6050S of the Code, payments of loan origination fees and capitalized interest received in calendar year 2004 on qualified education loans made on or after September 1, 2004.
This document modifies Notice 2002-70, 2002-2 C.B. 765, and Notice 2003-76, 2003-49 I.R.B. 1181, to remove certain reinsurance arrangements, which involve producer owned reinsurance companies (PORCs) from those identified as a “listed transaction,” and notifies taxpayers that the Service will continue to scrutinize such arrangements. Notices 2002-70 and 2003-76 modified.
Nonbank trustees; section 1.408-2(e) of the regulations. This announcement contains a list of entities previously approved to act as nonbank trustees and nonbank custodians within the meaning of section 1.408-2(e) of the regulations. In addition, the announcement contains instructions on how errors in the list may be corrected. Announcement 2003-54 updated and superseded.
Form 5500; Schedule B; actuarial data. This announcement clarifies the instructions to line 8c of the 2003 Schedule B of Form 5500.
This notice alerts taxpayers to recent amendments to section 501(c)(15) of the Code that may affect the qualification of entities as tax-exempt property and casualty insurance companies described in section 501(c)(15). The notice advises taxpayers that the Service will continue to scrutinize the eligibility of entities claiming to be tax-exempt property and casualty insurance companies.
This document states that relief from the section 6715 penalty for highway use of dyed diesel fuel in Florida is extended until October 5, 2004. Announcement 2004-70 amended.
This notice sets out transactions that have been identified by the Department of the Treasury and the IRS as “listed transactions” for purposes of the regulations under sections 6011 and 6111 of the Code. Notice 2003-76 supplemented and superseded.
General rules and specifications for private printing of substitute forms. This procedure provides requirements for reproducing paper substitutes and for furnishing substitute recipient statements for Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S. It will be reproduced as the next revision of Publication 1179. Rev. Proc. 2003-28 superseded.
This announcement states that Publication 1187, Specifications for Filing Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, Electronically or Magnetically, will not be revised by the beginning of the testing season November 1 through December 15, 2004, and details changes to the publication so filers may submit a test file.
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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, legislation, court decisions, and other items of general interest. It is published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin contents are compiled 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 procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered, and Service personnel and others concerned 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 Other Related Items, and Subpart B, Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous. 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 Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secretary (Enforcement).
Part IV.—Items of General Interest. This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period.
It is the policy of the Internal Revenue Service to announce at an early date whether it will follow the holdings in certain cases. An Action on Decision is the document making such an announcement. An Action on Decision will be issued at the discretion of the Service only on unappealed issues decided adverse to the government. Generally, an Action on Decision is issued where its guidance would be helpful to Service personnel working with the same or similar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as public guidance and may not be cited as precedent.
Actions on Decisions shall be relied upon within the Service only as conclusions applying the law to the facts in the particular case at the time the Action on Decision was issued. Caution should be exercised in extending the recommendation of the Action on Decision to similar cases where the facts are different. Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.
Prior to 1991, the Service published acquiescence or nonacquiescence only in certain regular Tax Court opinions. The Service has expanded its acquiescence program to include other civil tax cases where guidance is determined to be helpful. Accordingly, the Service now may acquiesce or nonacquiesce in the holdings of memorandum Tax Court opinions, as well as those of the United States District Courts, Claims Court, and Circuit Courts of Appeal. Regardless of the court deciding the case, the recommendation of any Action on Decision will be published in the Internal Revenue Bulletin.
The recommendation in every Action on Decision will be summarized as acquiescence, acquiescence in result only, or nonacquiescence. Both “acquiescence” and “acquiescence in result only” mean that the Service accepts the holding of the court in a case and that the Service will follow it in disposing of cases with the same controlling facts. However, “acquiescence” indicates neither approval nor disapproval of the reasons assigned by the court for its conclusions; whereas, “acquiescence in result only” indicates disagreement or concern with some or all of those reasons. “Nonacquiescence” signifies that, although no further review was sought, the Service does not agree with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit court of appeals, a “nonacquiescence” indicates that the Service will not follow the holding on a nationwide basis. However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit.
The Actions on Decisions published in the weekly Internal Revenue Bulletin are consolidated semiannually and appear in the first Bulletin for July and the Cumulative Bulletin for the first half of the year. A semiannual consolidation also appears in the first Bulletin for the following January and in the Cumulative Bulletin for the last half of the year.
The Commissioner ACQUIESCES in the following decision:
United States Internal Revenue
Service v. Donald Snyder,
343 F.3d 1171 (9th Cir. 2003)
 Acquiescence relating to whether the value of a debtor's interest in a pension plan that is excluded from the bankruptcy estate under Bankruptcy Code section 541(c)(2) should be included in the value of the Service's secured claim under Bankruptcy Code section 506(a).
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2004.
This revenue ruling provides various prescribed rates for federal income tax purposes for October 2004 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable 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 percentages for determining the low-income housing credit described in section 42(b)(2) for buildings placed in service during the current month. Finally, 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. 2004-96 TABLE 1|
|Applicable Federal Rates (AFR) for October 2004|
|Period for Compounding|
|REV. RUL. 2004-96 TABLE 2|
|Adjusted AFR for October 2004|
|Period for Compounding|
|Short-term adjusted AFR||1.57%||1.56%||1.56%||1.55%|
|Mid-term adjusted AFR||2.84%||2.82%||2.81%||2.80%|
|Long-term adjusted AFR||4.27%||4.23%||4.21%||4.19%|
|REV. RUL. 2004-96 TABLE 3|
|Rates Under Section 382 for October 2004|
|Adjusted federal long-term rate for the current month||4.27%|
|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.)||4.64%|
|REV. RUL. 2004-96 TABLE 4|
|Appropriate Percentages Under Section 42(b)(2) for October 2004|
|Appropriate percentage for the 70% present value low-income housing credit||7.98%|
|Appropriate percentage for the 30% present value low-income housing credit||3.42%|
|REV. RUL. 2004-96 TABLE 5|
|Rate Under Section 7520 for October 2004|
|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 interest||4.4%|
This notice provides rules interpreting the reasonable mortality charge requirement contained in § 7702(c)(3)(B)(i) of the Internal Revenue Code.Specifically, this notice supplements Notice 88-128, 1988-2 C.B. 540, by providing safe harbors regarding the use of either the 1980 Commissioners’ Standard Ordinary mortality and morbidity tables (1980 CSO tables) or the 2001 Commissioners’ Standard Ordinary mortality and morbidity tables (2001 CSO tables) by taxpayers to determine whether mortality charges are reasonable. These safe harbors are designed to assist taxpayers in complying with the requirements of § 7702(c)(3)(B)(i).
Section 7702 of the Code defines the term “life insurance contract” for purposes of the Code. Section 7702(a) provides that a “life insurance contract” is any contract that is a life insurance contract under the applicable law, but only if such contract either (1) meets the cash value accumulation test of § 7702(b), or (2) both meets the guideline premium requirements of § 7702(c) and falls within the cash value corridor of § 7702(d).
Section 7702(c)(3)(B)(i) provides that the guideline single premium under § 7702(c) is determined on the basis of reasonable mortality charges that meet the requirements (if any) prescribed in regulations and that (except as provided in regulations) do not exceed the mortality charges specified in the prevailing commissioners’ standard tables (as defined in § 807(d)(5)) as of the time the contract is issued. The mortality charges specified in § 7702(c)(3)(B)(i) are also used for determining the “net single premium” (see § 7702(b)(2)(B)), and the “guideline level premium” (see § 7702(c)(4)). The same reasonable mortality charge standard applies for purposes of determining whether a life insurance contract is a modified endowment contract under 7702A (see § 7702A(c)(1)(B)).
Section 807(d)(5)(A) provides that the term “prevailing commissioners’ standard tables” means, with respect to any contract, the most recent commissioners’ standard tables prescribed by the National Association of Insurance Commissioners (NAIC) that are permitted to be used in computing reserves for that type of contract under the insurance laws of at least 26 states when the contract was issued. Section 807(d)(5)(B) provides a 3-year transition period during which an insurer may use either the newly prevailing CSO tables or those that were previously prevailing.
The 2001 CSO tables prescribed by the NAIC became the prevailing commissioners’ standard tables within the meaning of section 807(d)(5) during calendar year 2004.In each of the states that have adopted the 2001 CSO tables, the 1980 CSO tables may be used for contracts issued in calendar years through 2008. After 2008, use of the 2001 CSO tables will be mandatory in these states. In states that have not yet adopted the 2001 CSO tables, use of the 1980 CSO tables is still required.
Pending publication of additional guidance, the following safe harbors will apply for purposes of § 7702:
.01 Notice 88-128. The interim rules described in Notice 88-128 remain in effect, except as otherwise modified by this notice.
.02 1980 CSO tables. A mortality charge with respect to a life insurance contract will satisfy the requirements of § 7702(c)(3)(B)(i) so long as (1) the mortality charge does not exceed 100 percent of the applicable mortality charge set forth in the 1980 CSO tables; (2) the mortality charge does not exceed the mortality charge specified in the contract at issuance; (3) the contract is issued in a state that permits or requires the use of the 1980 CSO tables at the time the contract is issued; and (4) the contract is issued before January 1, 2009.
.03 2001 CSO tables. A mortality charge with respect to a life insurance contract will satisfy the requirements of § 7702(c)(3)(B)(i) so long as (1) the mortality charge does not exceed 100 percent of the applicable mortality charge set forth in the 2001 CSO tables; (2) the mortality charge does not exceed the mortality charge specified in the contract at issuance; and (3) either the contract is issued after December 31, 2008, or the contract is issued before January 1, 2009, in a state that permits or requires the use of the 2001 CSO tables at the time the contract is issued.
Mortality charges that do not exceed the applicable charges in gender- or smoker-based variations of the 1980 CSO tables or 2001 CSO tables (as applicable) will be treated as reasonable mortality charges, provided the following requirements are satisfied:
.01 Unisex tables. If a state permits minimum nonforfeiture values for all contracts issued under a plan of insurance to be determined using the 1980 or 2001 CSO Gender-Blended Mortality tables (“unisex tables”), then the applicable mortality charges in those tables are treated as reasonable mortality charges for female insureds provided the same tables are used to determine mortality charges for male insureds.
.02 Smoker/nonsmoker tables. If a state permits minimum nonforfeiture values for all contracts issued under a plan of insurance to be determined using the 1980 or 2001 CSO Smoker and Nonsmoker Mortality tables (“smoker/nonsmoker tables”), then the applicable mortality charges in those tables for smoker insureds are treated as reasonable mortality charges provided nonsmoker tables are used to determine nonsmoker mortality charges.
.01 For purposes of this notice, the date on which a contract was issued generally is to be determined according to the standards that applied for purposes of the original effective date of section 7702. See H.R. Conf. Rep. No. 861, 98th Cong., 2d Sess. 1076 (1984), 1984-3 (Vol. 2) C.B. 330; see also 1 Staff of Senate Comm. on Finance, 98th Cong., 2d Sess., Deficit Reduction Act of 1984, Explanation of Provisions Approved by the Committee on March 21, 1984, at 579 (Comm. Print 1984). Thus, contracts received in exchange for existing contracts are to be considered new contracts issued on the date of the exchange. For these purposes, a change in an existing contract is not considered to result in an exchange if the terms of the resulting contract (that is, the amount and pattern of death benefit, the premium pattern, the rate or rates guaranteed on issuance of the contract, and mortality and expense charges) are the same as the terms of the contract prior to the change.
.02 Notwithstanding Section 5.01, if a life insurance contract satisfied Section 3.01 or Section 3.02 when originally issued, a change from previous tables to the 2001 CSO tables is not required if:
(a) The change, modification, or exercise of a right to modify, add or delete benefits is pursuant to the terms of the contract;
(b) The state in which the contract is issued does not require use of the 2001 CSO tables for that contract under its standard valuation and minimum nonforfeiture laws; and
(c) The contract continues upon the same policy form or blank.
The changes, modifications, or exercises of contractual provisions referred to in this subsection include addition or removal of a rider, an increase or decrease in death benefit (if the change is not underwritten), and a change from an option 1 to option 2 contract or vice versa.
The Internal Revenue Service and the Treasury Department recognize that additional guidance may be needed regarding the application of § 7702(c)(3)(B)(i). Therefore, the Treasury Department and the IRS request comments from taxpayers regarding guidance needed to address issues not specifically addressed by this notice or by Notice 88-128, including issues addressed by § 1.7702-1 of the proposed Income Tax Regulations, published in the Federal Register on July 5, 1991 (56 Fed. Reg. 30718).
Comments should be submitted by January 10, 2005. Comments may be submitted to CC:PA:RU (Notice 2004-61), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Comments may be hand delivered between the hours of 8:00 a.m. and 4 p.m. Monday to Friday to CC:PA:RU (Notice 2004-61), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Alternatively, comments may be submitted via the internet at Notice.Comments@irscounsel.treas.gov. All comments will be available for public inspection and copying.
This notice serves as an “administrative pronouncement” as that term is described in § 1.6661-3(b)(2) of the regulations and may be relied upon to the same extent as a revenue ruling or a revenue procedure.
This notice announces that the Internal Revenue Service will not assert penalties under section 6721 (failure to file correct information returns) or section 6722 (failure to furnish correct information statements) of the Internal Revenue Code for the failure to report under section 6050S payments attributable to loan origination fees and capitalized interest received in calendar year 2004 on qualified education loans made on or after September 1, 2004, if a person receiving payments satisfies the requirements set forth below. This notice also announces that a borrower who receives an information statement indicating that it does not include payments of loan origination fees may use any reasonable method to allocate the loan origination fees over the term of the loan for purposes of the deduction allowable under section 221.
Section 6050S requires certain persons (payees) who receive payments of interest on one or more qualified education loans, as defined in section 221(d)(1), to file information returns with the Service and to furnish a corresponding information statement to the individual named on the information return (borrower) showing the information that is reported to the Service. The return and statement are required to include information concerning the aggregate amount of interest received from the individual during the calendar year to assist taxpayers and the Service in determining the amount of qualified education loan interest that taxpayers may deduct under section 221. The specific information reporting requirements applicable to payees for the calendar years 1998 through 2001 are described in Notice 98-7, 1998-1 C.B. 339 (as modified by Notice 98-54, 1998-2 C.B. 641; Notice 99-37, 1999-2 C.B. 124; and Notice 2000-62, 2000-2 C.B. 587).
On April 29, 2002, the Treasury Department and the Service issued final regulations under section 6050S. See 67 Fed. Reg. 20901. The final regulations extended the reporting requirements described in Notice 98-7 (as modified) for calendar year 2002. The final regulations apply to information returns required to be filed, and information statements required to be furnished, for payments received during calendar year 2003 and later years. Section 1.6050S-3(e)(1) of the Income Tax Regulations contained a special transitional rule under which payees were not required to report payments of loan origination fees or capitalized interest received on qualified education loans made before January 1, 2004.
On May 7, 2004, the Treasury Department and the Service finalized the section 221 regulations and amended section 1.6050S-3(e) by extending the special transitional rule. See 69 Fed. Reg. 25489. Amended section 1.6050S-3(e)(1) provides that payees are not required to report payments of loan origination fees and capitalized interest for qualified education loans made before September 1, 2004. For qualified education loans made on or after September 1, 2004, however, payees are required to report payments of interest (including loan origination fees and capitalized interest) received on qualified education loans on Form 1098-E, “Student Loan Interest Statement.”
Payees have advised the Treasury Department and the Service that the period of time between May 7, 2004, the publication date of the section 221 regulations and the amended section 6050S regulations, and September 1, 2004, the date as of which payees must begin to capture information on payments of loan origination fees and capitalized interest, does not provide sufficient lead time for some payees to make the necessary programming changes to comply with the reporting requirements.
In light of these comments, the Service will not assert penalties under section 6721 or section 6722 for failure to report payments attributable to loan origination fees and capitalized interest received in calendar year 2004 on a qualified education loan made on or after September 1, 2004, if the payee:
(1) files and furnishes in a timely manner a Form 1098-E (or other appropriate information statement) that (i) includes the amount of interest (except for any loan origination fees or capitalized interest) received in 2004 in box 1, (ii) does not include a check in box 2, and (iii) includes all other required information; and
(2) furnishes a statement to the borrower indicating that the amount of interest reported in box 1 of Form 1098-E for calendar year 2004 does not include payments attributable to either loan origination fees or capitalized interest received on qualified education loans made on or after September 1, 2004, and that the borrower may be able to deduct amounts in addition to the amount reported in box 1.
The penalty relief under this notice will allow additional time for payees to make the necessary programming changes to enable them to capture information on and report payments of loan origination fees and capitalized interest received in 2005 and future calendar years consistent with the reporting requirements of the amended section 6050S regulations for qualified education loans made on or after September 1, 2004.
Forms 1098-E for calendar year 2004 must be filed with the Service by February 28, 2005, if filed on paper or by magnetic media, or by March 31, 2005, if filed electronically. In addition, payees must furnish information statements to the borrower on or before January 31, 2005.
Notwithstanding sections 1.163-7(a) and 1.1275-2(a), a borrower who receives a Form 1098-E (or other appropriate information statement) indicating that it does not include payments of loan origination fees may use any reasonable method to allocate the loan origination fees over the term of the loan for purposes of the deduction allowable under section 221. A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable.
This notice alerts taxpayers to recent amendments to § 501(c)(15) of the Internal Revenue Code. These amendments may affect the qualification of entities as tax-exempt property and casualty insurance companies described in § 501(c)(15). This notice advises taxpayers that the Service will continue to scrutinize the eligibility of entities claiming to be tax-exempt property and casualty insurance companies. See Notice 2003-35, 2003-1 C.B. 992.
Section 501(a) provides that an organization described in § 501(c) is exempt from federal income tax. Prior to the recent amendments, former § 501(c)(15)(A) provided that an insurance company, other than a life insurance company, was tax-exempt if its net written premiums (or, if greater, its direct written premiums) did not exceed $350,000. For purposes of determining whether the insurance company met the $350,000 premium test for the taxable year, the premiums received in that taxable year by all companies or associations in the same controlled group (as defined in § 831(b)(2)(B)(ii) of the Code) as the insurance company were treated as though received by the insurance company.
The Pension Funding Equity Act, P.L. 108-218, (the “Act”) was enacted on April 10, 2004. Section 206 of the Act made several changes to § 501(c)(15) that, in general, are effective for taxable years beginning after December 31, 2003. Specifically, the Act amended § 501(c)(15) to provide that a property and casualty insurance company is eligible to be exempt from federal income tax if (a) its gross receipts for the taxable year do not exceed $600,000, and (b) more than 50 percent of its gross receipts for the taxable year consist of premiums. See § 501(c)(15)(A)(i). For purposes of these tests, amounts received by all members of the insurance company’s controlled group (including foreign and tax-exempt companies) are taken into account. See § 501(c)(15)(C). Alternative gross receipts and premium tests apply to small mutual insurance companies. See § 501(c)(15)(A)(ii).
The Act clarifies that, for purposes of § 501(c)(15), the term “insurance company” has the same meaning as in § 816(a) of the Code, which provides that a company is an insurance company if more than half of its business during the taxable year is the issuing of insurance or annuity contracts or the reinsuring of risks underwritten by insurance companies.
The recent amendments to § 501(c)(15) may affect the qualification of some insurance companies under § 501(c)(15) for taxable years beginning after December 31, 2003.
For example, a non-life stock insurance company with $650,000 of gross receipts in a taxable year would have been eligible to be exempt from federal income tax before the recent amendments to § 501(c)(15) if the company’s written premiums for the year were $350,000 or less. However, for taxable years beginning after December 31, 2003, an insurance company with $650,000 of gross receipts in a taxable year will not be eligible for exemption from tax under § 501(c)(15), as amended by the Act, because the $600,000 gross receipts test will not be met.
Conversely, a non-life stock insurance company with $500,000 of gross receipts in a taxable year would not have been eligible to be exempt from federal income tax under former § 501(c)(15) if the company’s written premiums for the year were $375,000. However, for taxable years beginning after December 31, 2003, an insurance company with $500,000 of gross receipts in a taxable year, including $375,000 from premiums, will be eligible for exemption from tax under § 501(c)(15), as amended by the Act. Nonetheless, if the same company is a member of a controlled group (as defined in § 501(c)(15)(C)), it will not qualify if other members of the group have gross receipts in the taxable year in excess of $100,000 because the $600,000 gross receipts test will not be met.
As previously described in Notice 2003-35, 2003-1 C.B. 992, the Service will continue to challenge the exemption of any entity that claims to be described in § 501(c)(15), but that does not meet the requirements of that section, regardless of whether the exemption is claimed pursuant to an existing determination letter or on a return filed with the Service. The Service will challenge the qualification of an entity under former § 501(c)(15) for any open taxable year beginning prior to January 1, 2004. The Service will challenge the qualification of an entity under § 501(c)(15), as amended by the Act, for taxable years beginning after December 31, 2003.
The amendments to § 501(c)(15) of the Code generally are effective for taxable years beginning after December 31, 2003. A special transition rule applies with respect to certain insurance companies in receivership or liquidation.
This notice modifies Notice 2002-70, 2002-2 C.B. 765, and Notice 2003-76, 2003-49 I.R.B. 1181, by removing the identification of transactions that are the same as, or substantially similar to, transactions described in Notice 2002-70 as “listed transactions” for purposes of § 1.6011-4(b)(2) of the Income Tax Regulations and §§ 301.6111-2(b)(2) and 301.6112-1(b)(2) of the Procedure and Administration Regulations. The Service will, however, continue to scrutinize transactions described in Notice 2002-70 that are being used to shift income from taxpayers to related companies purported to be insurance companies that are subject to little or no U.S federal income tax.
Notice 2002-70 describes a reinsurance arrangement involving a taxpayer (“Taxpayer”) (typically a service provider, automobile dealer, lender, or retailer) that offers its customers the opportunity to purchase an insurance contract through Taxpayer in connection with the products or services being sold. The insurance provides coverage for repair or replacement costs if the product breaks down or is lost, stolen, or damaged, or coverage for the customer’s payment obligations in case the customer dies, or becomes disabled or unemployed. Taxpayer offers the insurance to its customers by acting as an insurance agent for an unrelated insurance company (“Company X”). Taxpayer receives a sales commission from Company X equal to a percentage of the premiums paid by Taxpayer’s customers. Taxpayer forms a wholly owned corporation (“Company Y”), typically in a foreign country, to reinsure the policies sold by Taxpayer. Promoters sometimes refer to these companies as producer owned reinsurance companies or “PORCs.” If Company Y is a foreign corporation, it typically elects to be treated as a domestic insurance company under § 953(d) of the Internal Revenue Code. Company Y takes the position that it is entitled to the benefits of § 501(c)(15) (providing that certain small non-life insurance companies are tax exempt), § 806 (providing a deduction for certain life insurance companies with life insurance company taxable income not in excess of $15,000,000), or § 831(b) (allowing qualifying non-life insurance companies whose net written premiums do not exceed $1,200,000 to elect to be taxed solely on investment income). Taxpayer receives premiums from its customers and remits those premiums (typically net of its sales commission) to Company X. Company X pays any claims and state premium taxes due and retains an amount from the premiums received from Taxpayer. Under Company Y’s reinsurance agreement with Company X, Company Y reinsures all insurance policies that Taxpayer sells to its customers. Company X transfers the remainder of the premiums to Company Y as reinsurance premiums.
Notice 2002-70 alerts taxpayers that, in appropriate cases, the Service intends to challenge the purported tax benefits from these transactions on a number of grounds. Notice 2002-70 also identifies transactions that are the same as, or substantially similar to, the transaction described in the Notice 2002-70 as “listed transactions” for purposes of § 1.6011-4T(b)(2) of the temporary Income Tax Regulations (now § 1.6011-4(b)(2) of the Income Tax Regulations) and §§ 301.6111-2T(b)(2) of the temporary Procedure and Administration Regulations (now §§ 301.6111-2(b)(2) of the Procedure and Administration Regulations).
Section 206 of the Pension Funding Equity Act, P.L. 108-218, amended § 501(c)(15) effective for taxable years beginning after December 31, 2003. Notice 2004-64, 2004-41 I.R.B. (October 12, 2004), describes the amendments and notifies taxpayers that the Service will continue to scrutinize the tax-exempt status of entities claiming to be described in § 501(c)(15).
The Treasury Department and the Service have concluded that these transactions no longer should be identified as “listed transactions” for purposes of the disclosure, registration, and list maintenance requirements. Since issuing Notice 2002-70, the Service has examined various types of these arrangements. These examinations have revealed fewer abusive transactions than anticipated. Further, the Treasury Department and the Service anticipate that the recent amendments to § 501(c)(15) will curtail the use of this provision by a number of these arrangements. Accordingly, transactions will no longer be identified as “listed transactions” for purposes of §§ 1.6011-4(b)(2), 301.6111-2(b)(2) and 301.6112-1(b)(2) solely because they are the same as, or substantially similar to, the transaction described in Notice 2002-70. However, the Service will continue to scrutinize transactions described in Notice 2002-70 that are being used to shift income from taxpayers to related companies purported to be insurance companies that are subject to little or no U.S federal income tax. Although a transaction is no longer a “listed transaction” solely because the transaction is described in Notice 2002-70, the transaction may still otherwise be subject to the disclosure requirement of § 6011, the registration requirement of § 6111, or the list maintenance requirement of § 6112.
Notice 2002-70 and Notice 2003-76 are modified by removing the identification of transactions that are the same as, or substantially similar to, transactions described in Notice 2002-70 as “listed transactions” effective for taxable years for which the due date of the return (including extensions, whether or not actually requested) is after September 24, 2004.
For further information regarding this notice, contact Nancy Vozar Knapp at (202) 283-8622, John E. Glover (202) 622-3970, or Theodore Setzer at (202) 622-3870 (not a toll-free call).
This notice updates the list of transactions that have been determined by the Internal Revenue Service to be “listed transactions” for purposes of § 1.6011-4(b)(2) of the Income Tax Regulations and §§ 301.6111-2(b)(2) and 301.6112-1(b)(2) of the Procedure and Administration Regulations. This notice restates the list of “listed transactions” in Notice 2003-76, 2003-49 I.R.B. 1181, and updates the list by adding transactions identified as “listed transactions” in notices and other guidance released subsequent to November 7, 2003, and by eliminating transactions described in Part II of Notice 98-5, 1998-1 C.B. 334, and Notice 2002-70, 2002-2 C.B. 765.
Transactions that are the same as or substantially similar to transactions described in the list below have been determined by the Service to be tax avoidance transactions and are “listed transactions” for purposes of §§ 1.6011-4(b)(2), 301.6111-2(b)(2) and 301.6112-1(b)(2). As a result, taxpayers may need to disclose their participation in these listed transactions as prescribed in § 1.6011-4, and promoters (or other persons responsible for registering tax shelter transactions) may need to register these transactions under § 301.6111-2. In addition, material advisors must maintain lists of investors and other information with respect to these listed transactions pursuant to § 301.6112-1.
(1) Rev. Rul. 90-105, 1990-2 C.B. 69 (transactions in which taxpayers claim deductions for contributions to a qualified cash or deferred arrangement or matching contributions to a defined contribution plan where the contributions are attributable to compensation earned by plan participants after the end of the taxable year (identified as “listed transactions” on February 28, 2000)). See also Rev. Rul. 2002-46, 2002-2 C.B. 117 (result is the same, and transactions are substantially similar, even though the contributions are designated as satisfying a liability established before the end of the taxable year), modified by Rev. Rul. 2002-73, 2002-2 C.B. 805;
(2) Notice 95-34, 1995-1 C.B. 309 (certain trust arrangements purported to qualify as multiple employer welfare benefit funds exempt from the limits of §§ 419 and 419A of the Internal Revenue Code (identified as “listed transactions” on February 28, 2000)). See also § 1.419A(f)(6)-1 of the Income Tax Regulations (10 or more employer plans);
(3) Transactions substantially similar to those at issue in ASA Investerings Partnership v. Commissioner, 201 F.3d 505 (D.C. Cir. 2000), and ACM Partnership v. Commissioner, 157 F.3d 231 (3d Cir. 1998) (transactions involving contingent installment sales of securities by partnerships in order to accelerate and allocate income to a tax-indifferent partner, such as a tax-exempt entity or foreign person, and to allocate later losses to another partner (identified as “listed transactions” on February 28, 2000));
(4) Section 1.643(a)-8 of the Income Tax Regulations (transactions involving distributions described in § 1.643(a)-8 from charitable remainder trusts (identified as “listed transactions” on February 28, 2000));
(5) Notice 99-59, 1999-2 C.B. 761 (transactions involving the distribution of encumbered property in which taxpayers claim tax losses for capital outlays that they have in fact recovered (identified as “listed transactions” on February 28, 2000)). See also § 1.301-1(g) of the Income Tax Regulations;
(6) Section 1.7701(l)-3 of the Income Tax Regulations (transactions involving fast-pay arrangements as defined in § 1.7701(l)-3(b) (identified as “listed transactions” on February 28, 2000));
(7) Rev. Rul. 2000-12, 2000-1 C.B. 744 (certain transactions involving the acquisition of two debt instruments the values of which are expected to change significantly at about the same time in opposite directions (identified as “listed transactions” on February 28, 2000));
(8) Notice 2000-44, 2000-2 C.B. 255 (transactions generating losses resulting from artificially inflating the basis of partnership interests (identified as “listed transactions” on August 11, 2000)). See also § 1.752-6T of the temporary Income Tax Regulations and §§ 1.752-1(a) and 1.752-7 of the proposed Income Tax Regulations;
(9) Notice 2000-60, 2000-2 C.B. 568 (transactions involving the purchase of a parent corporation’s stock by a subsidiary, a subsequent transfer of the purchased parent stock from the subsidiary to the parent’s employees, and the eventual liquidation or sale of the subsidiary (identified as “listed transactions” on November 16, 2000));
(10) Notice 2000-61, 2000-2 C.B. 569 (transactions purporting to apply § 935 to Guamanian trusts (identified as “listed transactions” on November 21, 2000));
(11) Notice 2001-16, 2001-1 C.B. 730 (transactions involving the use of an intermediary to sell the assets of a corporation (identified as “listed transactions” on January 18, 2001));
(12) Notice 2001-17, 2001-1 C.B. 730 (transactions involving a loss on the sale of stock acquired in a purported § 351 transfer of a high basis asset to a corporation and the corporation’s assumption of a liability that the transferor has not yet taken into account for federal income tax purposes (identified as “listed transactions” on January 18, 2001));
(13) Notice 2001-45, 2001-2 C.B. 129 (certain redemptions of stock in transactions not subject to U.S. tax in which the basis of the redeemed stock is purported to shift to a U.S. taxpayer (identified as “listed transactions” on July 26, 2001));
(14) Notice 2002-21, 2002-1 C.B. 730 (transactions involving the use of a loan assumption agreement to inflate basis in assets acquired from another party to claim losses (identified as “listed transactions” on March 18, 2002));
(15) Notice 2002-35, 2002-1 C.B. 992 (transactions involving the use of a notional principal contract to claim current deductions for periodic payments made by a taxpayer while disregarding the accrual of a right to receive offsetting payments in the future (identified as “listed transactions” on May 6, 2002));
(16) Notice 2002-50, 2002-2 C.B. 98 (transactions involving the use of a straddle, a tiered partnership structure, a transitory partner, and the absence of a § 754 election to claim a permanent noneconomic loss (identified as “listed transactions” on June 25, 2002)); Notice 2002-65, 2002-2 C.B. 690 (transactions involving the use of a straddle, an S corporation or a partnership, and one or more transitory shareholders or partners to claim a loss while deferring an offsetting gain are substantially similar to transactions described in Notice 2002-50); and Notice 2003-54, 2003-33 I.R.B. 363 (transactions involving the use of economically offsetting positions, one or more tax indifferent parties, and the common trust fund accounting rules of § 584 to allow a taxpayer to claim a noneconomic loss are substantially similar to transactions described in Notice 2002-50 and Notice 2002-65);
(17) Rev. Rul. 2002-69, 2002-2 C.B. 760, modifying and superseding Rev. Rul. 99-14, 1999-1 C.B. 835 (transactions in which a taxpayer purports to lease property and then purports to immediately sublease it back to the lessor (often referred to as “lease-in/lease-out” or “LILO” transactions) (identified as “listed transactions” on February 28, 2000));
(18) Rev. Rul. 2003-6, 2003-1 C.B. 286 (certain arrangements involving the transfer of employee stock ownership plans (ESOPs) that hold stock in an S corporation for the purpose of claiming eligibility for the delayed effective date of § 409(p) (identified as “listed transactions” on December 17, 2002));
(19) Notice 2003-22, 2003-1 C.B. 851 (certain arrangements involving leasing companies that have been used to avoid or evade federal income and employment taxes (identified as “listed transactions” on April 4, 2003));
(20) Notice 2003-24, 2003-1 C.B. 853 (certain arrangements that purportedly qualify as collectively-bargained welfare benefit funds excepted from the account limits of §§ 419 and 419A (identified as “listed transactions” on April 11, 2003));
(21) Notice 2003-47, 2003-30 I.R.B. 132 (transactions involving compensatory stock options and related persons to avoid or evade federal income and employment taxes (identified as “listed transactions” on July 1, 2003));
(22) Notice 2003-55, 2003-34 I.R.B. 395 (transactions in which one participant claims to realize rental or other income from property or service contracts and another participant claims the deductions related to that income (often referred to as “lease strips”)), modifying and superseding Notice 95-53, 1995-2 C.B. 334 (identified as “listed transactions” on February 28, 2000);
(23) Notice 2003-77, 2003-49 I.R.B. 1182 (certain transactions that use contested liability trusts improperly to accelerate deductions for contested liabilities under § 461(f) (identified as “listed transactions” on November 19, 2003)). See also § 1.461-2 of the Income Tax Regulations. See Rev. Proc. 2004-31, 2004-22 I.R.B. 986, for procedures which taxpayers must use to change their methods of accounting for deducting under § 461(f) amounts transferred to trusts in transactions described in Notice 2003-77.
(24) Notice 2003-81, 2003-51 I.R.B. 1223 (certain transactions in which a taxpayer claims a loss upon the assignment of a § 1256 contract to a charity but fails to report the recognition of gain when the taxpayer’s obligation under an offsetting non-section 1256 contract terminates (identified as “listed transactions” on December 4, 2003));
(25) Notice 2004-8, 2004-4 I.R.B. 333 (certain transactions designed to avoid the limitations on contributions to Roth IRAs described in § 408A (identified as “listed transactions” on December 31, 2003));
(26) Rev. Rul. 2004-4, 2004-6 I.R.B. 414 (transactions that involve segregating the business profits of an ESOP-owned S corporation in a qualified subchapter S subsidiary, so that rank-and-file employees do not benefit from participation in the ESOP (identified as “listed transactions” on January 23, 2004));
(27) Transactions that are the same as, or substantially similar to, those described in Situation 2 of Rev. Rul. 2004-20, 2004-10 I.R.B. 546, modifying and superseding Rev. Rul. 55-748, 1955-2 C.B. 234 (certain arrangements in which an employer deducts contributions to a qualified pension plan for premiums on life insurance contracts that provide for death benefits in excess of the participant’s death benefit, where under the terms of the plan, the balance of the death benefit proceeds revert to the plan as a return on investment) (identified as “listed transactions” on February 13, 2004)). See also Rev. Rul. 2004-21, 2004-10 I.R.B. 544, §§ 1.79-1(d)(3), 1.83-3(e) and 1.402(a)-1(a)(1) and (2) of the proposed Income Tax Regulations, and Rev. Proc. 2004-16, 2004-10 I.R.B. 559;
(28) Notice 2004-20, 2004-11 I.R.B. 608 (transactions in which, pursuant to a prearranged plan, a domestic corporation purports to acquire stock in a foreign target corporation and to make an election under § 338 before selling all or substantially all of the target corporation’s assets in a preplanned transaction that generates a taxable gain for foreign tax purposes (but not for U.S. tax purposes) (identified as “listed transactions” on February 17, 2004));
(29) Notice 2004-30, 2004-17 I.R.B. 828 (transactions in which S corporation shareholders attempt to transfer the incidence of taxation on S corporation income by purportedly donating S corporation nonvoting stock to an exempt organization while retaining the economic benefits associated with that stock (identified as “listed transactions” on April 1, 2004)); and
(30) Notice 2004-31, 2004-17 I.R.B. 830 (transactions in which corporations claim inappropriate deductions for payments made through a partnership (identified as “listed transactions” on April 1, 2004)).
Transactions that are the same as, or substantially similar to, transactions described in the list below will no longer be considered listed transactions for purposes of §§ 1.6011-4(b)(2), 301.6111-2(b)(2) and 301.6112-1(b)(2). No inference is intended, however, as to whether such transactions are otherwise subject to the disclosure requirements of § 6011, the registration requirements of § 6111, or the list maintenance requirements of § 6112.
(1) Transactions described in Part II of Notice 98-5, 1998-1 C.B. 334 (transactions in which the reasonably expected economic profit is insubstantial in comparison to the value of the expected foreign tax credits (identified as “listed transactions” on February 28, 2000)). Notice 2004-19, 2004-11 I.R.B. 606, withdrew Notice 98-5. Effective for taxable years for which the due date of the return (including extensions, whether or not actually requested) is after February 17, 2004, transactions will not be considered listed transactions for purposes of §§ 1.6011-4(b)(2) and 301.6112-1(b)(2) solely because they are the same as or substantially similar to the transactions or arrangements described in Part II of Notice 98-5. In addition, for offers made after February 17, 2004, transactions will not be considered listed transactions for purposes of § 301.6111-2(b)(2) solely because they are the same as or substantially similar to the transactions or arrangements described in Part II of Notice 98-5.
(2) Transactions described in Notice 2002-70, 2002-2 C.B. 765 (transactions involving reinsurance arrangements between a taxpayer and the taxpayer’s own reinsurance company that is subject to little or no federal income tax (identified as “listed transactions” on October 15, 2002)). Notice 2004-65, 2004-41 I.R.B. , modified Notice 2002-70 by removing the identification of transactions that are the same as, or substantially similar to, transactions described in Notice 2002-70 as listed transactions effective for taxable years for which the due date of the return (including extensions, whether or not actually requested) is after September 24, 2004.
Notice 2003-76, as modified by Notice 2004-19 and Notice 2004-65, is supplemented and superseded. For updates to this list, go to the IRS web page at www.irs.gov/businesses/corporations and click on Abusive Tax Shelters and Transactions. Notices and other published guidance will still be used to identify transactions that have been determined by the Service to be “listed transactions.”
The purpose of this revenue procedure is to set forth the 2004 requirements for:
Using official Internal Revenue Service (IRS) forms to file information returns with the IRS,
Preparing acceptable substitutes of the official IRS forms to file information returns with the IRS, and
Using official or acceptable substitute forms to furnish information to recipients.
This revenue procedure contains specifications for these information returns:
|1096||Annual Summary and Transmittal of U.S. Information Returns|
|1098||Mortgage Interest Statement|
|1098-E||Student Loan Interest Statement|
|1099-A||Acquisition or Abandonment of Secured Property|
|1099-B||Proceeds From Broker and Barter Exchange Transactions|
|1099-C||Cancellation of Debt|
|1099-CAP||Changes in Corporate Control and Capital Structure|
|1099-DIV||Dividends and Distributions|
|1099-G||Certain Government Payments|
|1099-H||Health Coverage Tax Credit (HCTC) Advance Payments|
|1099-LTC||Long-Term Care and Accelerated Death Benefits|
|1099-OID||Original Issue Discount|
|1099-PATR||Taxable Distributions Received From Cooperatives|
|1099-Q||Payments From Qualified Education Programs (Under Sections 529 and 530)|
|1099-R||Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.|
|1099-S||Proceeds From Real Estate Transactions|
|1099-SA||Distributions From an HSA, Archer MSA, or Medicare+Choice MSA|
|5498||IRA Contribution Information|
|5498-ESA||Coverdell ESA Contribution Information|
|5498-SA||HSA, Archer MSA, or Medicare+Choice MSA Information|
|W-2G||Certain Gambling Winnings|
|1042-S||Foreign Person's U.S. Source Income Subject to Withholding|
For purposes of this revenue procedure, a substitute form or statement is one that is not printed by the IRS. For a substitute form or statement to be acceptable to the IRS, it must conform to the official form or the specifications outlined in this revenue procedure. Do not submit any substitute forms or statements listed above to the IRS for approval. Privately printed forms may not state, “This is an IRS approved form.”
Filers making payments to certain recipients during a calendar year are required by the Internal Revenue Code (the Code) to file information returns with the IRS for these payments. These filers must also provide this information to their recipients. In some cases, this also applies to payments received. See Part 4 for specifications that apply to recipient statements (generally Copy B).
In general, section 6011 of the Code contains requirements for filers of information returns. A filer must file information returns on magnetic media, through electronic media, or on paper. A filer who is required to file 250 or more information returns of any one type during a calendar year must file those returns by magnetic media or electronic media.
Although not required, small volume filers (fewer than 250 returns during a calendar year) may file the forms on magnetic media or electronically. See the legal requirements for filing information returns (and providing a copy to a payee) in the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G and the 2004 Instructions for Form 1042-S. In addition, see Pub. 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically or Magnetically.
The IRS prints and provides the forms on which various payments must be reported. Alternatively, filers may prepare substitute copies of these IRS forms and use such forms to report payments to the IRS.
For copies of the official forms and instructions, call our toll-free number at 1-800-TAX-FORM (1-800-829-3676).
The IRS operates a central call site to answer questions related to information returns, penalties, and backup withholding. The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m., Eastern time. For your convenience, you may call the toll-free number, 1-866-455-7438. You may still use the original telephone number, 304-263-8700 (not toll-free). For TTY/TDD equipment, call 304-267-3367 (not toll-free). The call site can also be reached by email at email@example.com.
For other tax information related to business returns or accounts, call 1-800-829-4933. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax account questions or to order forms and publications.
The following changes have been made to this year's Revenue Procedure:
Use of an account number is no longer optional for 2004 returns filed. An account number is required if you have multiple accounts for a recipient for whom you are filing more than one information return of the same type.
Form 1099-B: New boxes have been added relating to broker reporting under reissued regulations. New boxes 5 and 6 have been added for brokers to report information regarding a corporation that had a change in corporate control and capital structure. Also, the related corporation name and address appear on the form below the recipient's name and address.
Form 1099-DIV: The boxes for post-May 5 capital gain distributions and qualified 5-year gain have been eliminated based on section 301 of the Jobs and Growth Tax Relief and Reconciliation Act of 2003.
Form 1099-SA and Form 5498-SA: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created new Code section 223 that establishes health savings accounts (HSAs). Forms 1099-MSA and 5498-MSA have been replaced with Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare+Choice MSA, and Form 5498-SA, HSA, Archer MSA, or Medicare+Choice MSA Information.
Rules and specifications for Form 1099-SA, were added to the Revenue Procedure. Exhibit T also shows an example of the form.
Rules and specifications for Form 5498-SA, were added to the Revenue Procedure. Exhibit W also shows an example of the form.
Electronic payee statements are permitted for all Forms 1099, 1098, and 5498 (see Section 4.5).
Paper substitutes for Form 1096 and Copy A of Forms 1098, 1099, 5498, W-2G, and 1042-S that totally conform to the specifications listed in this revenue procedure may be privately printed and filed as returns with the IRS. The reference to the Department of the Treasury - Internal Revenue Service should be included on all such forms.
If you are uncertain of any specification and want it clarified, you may submit a letter citing the specification, stating your understanding and interpretation of the specification, and enclosing an example of the form (if appropriate) to:Attn: Substitute Forms Program SE:W:CAR:MP:T:T:SP 1111 Constitution Ave., NW
Room 6406 Washington, DC 20224
Note. Allow at least 45 days for the IRS to respond.
You may also contact the Substitute Forms Program Unit via e-mail at
*firstname.lastname@example.org. Please enter “Substitute Forms” on the Subject Line.
Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S are subject to annual review and possible change. Therefore, filers are cautioned against overstocking supplies of privately printed substitutes. The specifications contained in this revenue procedure apply to 2004 forms only.
Proposed substitutes of Copy A must be an exact replica of the official IRS form with respect to layout and content. Proposed substitutes for Copy A that do not conform to the specifications in this revenue procedure are not acceptable. Further, if you file such forms with the IRS, you may be subject to a penalty for failure to file a correct information return under section 6721 of the Code. Generally, the penalty is $50 for each return where such failure occurs (up to $250,000). No IRS office is authorized to allow deviations from this revenue procedure.
Caution: Overuse of proportional fonts may cause you to be subject to penalties and delays in processing.
Copies B and Copies C of the following forms must contain the information in Part 4 to be considered a “statement” or “official form” under the applicable provisions of the Code. The format of this information is at the discretion of the filer with the exception of the location of the tax year, form number, form name, and the information for composite Form 1099 statements as outlined under Section 4.2.
Copy B, of the forms below, are for the following recipients.
|1098-E; 1099-A||For Borrower|
|1099-R; W-2G||Indicates that these forms may require Copy B to be attached to the federal income tax return.|
|All other Forms 1099; 1042-S||For Recipient|
|5498; 5498-SA||For Participant|
Copy C of the following forms are:
|1099-R||For Recipient's Records|
|All other Forms 1099||See Section 4.4.2|
|W-2G||For Winner's Records|
Note. On Copy C, Form 1099-LTC, you may reverse the locations of the policyholder's and the insured's name, street address, city, state, and ZIP code for easier mailing.
Form recipient means the person to whom you are required by law to furnish a copy of the official form or information statement. The form recipient may be referred to by different names on various Forms 1099 and related forms (“payer,” “borrower,” “student,” “debtor,” “policyholder,” “insured,” “transferor,” “recipient,” “participant,” or, in the case of Form W-2G, the “winner”). See Section 1.2.3 earlier.
Filer means the person or organization required by law to file a form listed in Section 1.1.2 with the IRS. As outlined earlier, a filer may be a payer, creditor, recipient of mortgage or student loan interest payments, educational institution, broker, barter exchange, person reporting real estate transactions, trustee or issuer of any individual retirement arrangement or medical savings account, or lender who acquires an interest in secured property or who has reason to know that the property has been abandoned.
Substitute form means a paper substitute of Copy A of an official form listed in Section 1.1.2 that totally conforms to the provisions in this revenue procedure.
Substitute form recipient statement means a paper statement of the information reported on a form listed in Section 1.1.2. This statement must be furnished to a person (form recipient), as defined under the applicable provisions of the Code and the applicable regulations.
Composite substitute statement means one in which two or more required statements (for example, Forms 1099-INT and 1099-DIV) are furnished to the recipient on one document. However, each statement must be designated separately and must contain all the requisite Form 1099 information except as provided under Section 4.2. A composite statement may not be filed with the IRS.
Form identifying numbers (for example, 9191 for Form 1099-DIV) must be printed in nonreflective black carbon-based ink in print positions 15 through 19 using an OCR A font. The checkboxes to the right of the form identifying numbers must be 10-point boxes. The “VOID” checkbox is in print position 25. The “CORRECTED” checkbox is in position 33. Measurements are from the left edge of the paper, not including the perforated strip. See Exhibits D and M.
The substitute form must be an exact replica of the official IRS form with respect to layout and content. To determine the correct form measurements, see Exhibits A through Y at the end of this publication.
Hot wax and cold carbon spots are not permitted on any of the internal form plies. These spots are permitted on the back of a mailer top envelope ply.
Use of chemical transfer paper for Copy A is acceptable.
The Government Printing Office (GPO) symbol must be deleted.
Color and paper quality for Copy A (cut sheets and continuous pinfeed forms) as specified by JCP Code 0-25, dated November 29, 1978, must be white 100% bleached chemical wood, optical character recognition (OCR) bond produced in accordance with the following specifications.
Note. Reclaimed fiber in any percentage is permitted provided the requirements of this standard are met.
|•||Acidity: Ph value, average, not less than||4.5|
|•||Basis Weight: 17 x 22-500 cut sheets||18-20|
|A tolerance of ±5 pct. is allowed.|
|•||Stiffness: Average, each direction, not less than-milligrams||50|
|•||Tearing strength: Average, each direction, not less than-grams||40|
|•||Opacity: Average, not less than-percent||82|
|A tolerance of +0.0005 inch (0.0127 mm) is allowed. Paper cannot vary more than 0.0004 inch (0.0102 mm) from one edge to the other.|
|•||Porosity: Average, not less than-seconds||10|
|•||Finish (smoothness): Average, each side-seconds||20-55|
|•||For information only, the Sheffield equivalent-units||170-100|
|•||Dirt: Average, each side, not to exceed-parts per million||8|
Chemical transfer paper is permitted for Copy A only if the following standards are met:
Only chemically backed paper is acceptable for Copy A. Front and back chemically treated paper cannot be processed properly by machine.
Carbon-coated forms are not permitted.
Chemically transferred images must be black.
All copies must be clearly legible. Hot wax and cold carbon spots are not permitted for Copy A. Interleaved carbon should be black and must be of good quality to assure legibility on all copies and to avoid smudging. Fading must be minimized to assure legibility.
All print on Copy A of Forms 1098, 1099, 5498, and the print on Form 1096 above the statement, “Return this entire page to the Internal Revenue Service. Photocopies are not acceptable.” must be in Flint J-6983 red OCR dropout ink or an exact match. However, the four-digit form identifying number must be in nonreflective carbon-based black ink in OCR A font.
The shaded areas of any substitute form should generally correspond to the format of the official form.
The printing for the Form 1096 statement and the following text may be in any shade or tone of black ink. Black ink should only appear on the lower part of the reverse side of Form 1096, where it will not bleed through and interfere with scanning.
Note. The instructions on the front and back of Form 1096, which include filing addresses, must be printed.
Separation between fields must be 0.1 inch.
Except for Form 1099-R and 1099-MISC, the numbered captions are printed as solid with no shaded background.
Other printing requirements are discussed below.
The contractor must initiate or have a quality control program to assure OCR ink density. Readings will be made when printed on approved 20 lb. white OCR bond with a reflectance of not less than 80%. Black ink must not have a reflectance greater than 15%. These readings are based on requirements of the “Scan-Optics Series 9000” Optical Scanner using Flint J-6983 red OCR dropout ink or an exact match.
The following testers and ranges are acceptable:
MacBeth PCM-II. The tested Print Contrast Signal (PCS) values when using the MacBeth PCM-II tester on the “C” scale must range from .01 minimum to .06 maximum.
Kidder 082A. The tested PCS values when using the Kidder 082A tester on the Infra Red (IR) scale must range from .12 minimum to .21 maximum. White calibration disc must be 100%. Sensitivity must be set at one (1).
Alternative testers. Alternative testers must be approved by the Government so that tested PCS values can be established. You may obtain approval by writing to the following address:Commissioner of Internal Revenue Attn: SE:W:CAR:MP:P:B:T 1111 Constitution Ave., NW Washington, DC 20224
Type must be substantially identical in size and shape to the official form. All rules are either 1/2-point or 3/4-point. Rules must be identical to those on the official IRS form.
Note. The form identifying number must be nonreflective carbon-based black ink in OCR A font.
Generally, three Forms 1098, 1099, or 5498 (Copy A) are contained on a single page, 8 inches wide (without any snap-stubs and/or pinfeed holes) by 11 inches deep.
Exceptions. Forms 1099-B, 1099-DIV, 1099-MISC, 1099-R, and 1042-S contain two documents per page.
There is a .33 inch top margin from the top of the corrected box, and a .25 inch right margin. There is a 1/32 (0.0313) inch tolerance for the right margin. If the right and top margins are properly aligned, the left margin for all forms will be correct. All margins must be free of print. See Exhibits A through Y in this publication for the correct form measurements.
These measurements are constant for all Forms 1098, 1099, and 5498. These measurements are shown only once in this publication, on Form 1098 (Exhibit B). Exceptions to these measurements are shown on the rest of the exhibits.
The depth of the individual trim size of each form on a page must be 32/3 inches, the same depth as the official form.
Exceptions. The depth of Forms 1099-B, 1099-DIV, 1099-MISC, 1099-R, and 1042-S is 51/2 inches.
Copy A (three per page; two per page for Forms 1099-B, 1099-DIV, 1099-MISC, 1099-R, and 1042-S) of privately printed continuous substitute forms must be perforated at each 11" page depth. No perforations are allowed between the 32/3" forms (51/2" for Forms 1099-B, 1099-DIV, 1099-MISC, or 1099-R) on a single copy page of Copy A.
The words “Do Not Cut or Separate Forms on This Page” must be printed in red dropout ink (as required by form specifications) between the three forms (two for Forms 1099-B, 1099-DIV, 1099-MISC, or 1099-R).
Note. Perforations are required between all the other individual copies (Copies B and C, and Copies 1 and 2 for Forms 1099-R and 1099-MISC, and Copy D for Forms 1099-LTC and 1099-R) in the set.
You must include the OMB Number on Copies A and Form 1096 in the same location as on the official form.
The words “For Privacy Act and Paperwork Reduction Act Notice, see the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G” must be printed on Copy A; “For more information and the Privacy Act and Paperwork Reduction Act Notice, see the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G” must be printed on Form 1096.
A postal indicia may be used if it meets the following criteria:
It is printed in the OCR ink color prescribed for the form, and
No part of the indicia is within one print position of the scannable area.
The printer's symbol (GPO) must not be printed on substitute Copy A. Instead, the employer identification number (EIN) of the forms printer must be entered in the bottom margin on the face of each individual form of Copy A, or on the bottom margin on the back of each Form 1096.
The Catalog Number (Cat. No.) shown on the 2004 forms is used for IRS distribution purposes and need not be printed on any substitute forms.
The form must not contain the statement “IRS approved” or any similar statement.
The form recipient's name, street address, city, state, ZIP code, and telephone number (if required) should be typed or machine printed in black ink in the same format as shown on the official IRS form. The city, state, and ZIP code must be on the same line.
The following rules apply to the form recipient's name(s):
The name of the appropriate form recipient must be shown on the first or second name line in the area provided for the form recipient's name.
No descriptive information or other name may precede the form recipient's name.
Only one form recipient's name may appear on the first name line of the form.
If the multiple recipients' names are required on the form, enter on the first name line the recipient name that corresponds to the recipient taxpayer identification number (TIN) shown on the form. Place the other form recipients' names on the second name line (only 2 name lines are allowable).
Because certain states require that trust accounts be provided in a different format, generally filers should provide information returns reflecting payments to trust accounts with the:
Trust's employer identification number (EIN) in the recipient's TIN area,
Trust's name on the recipient's first name line, and
Name of the trustee on the recipient's second name line.
Although handwritten forms will be accepted, the IRS prefers that filers type or machine print data entries. Also, filers should insert data in the middle of blocks well separated from other printing and guidelines, and take measures to guarantee clear, dark black, sharp images. Carbon copies and photocopies are not acceptable.
Use the account number box on all Forms 1098, 1099, 5498, and W-2G for an account number designation. The account number is required if you have multiple accounts for a recipient for whom you are filing more than one information return of the same type. Additionally, the IRS encourages you to include the recipient's account number on paper forms if your system of records uses the account number rather than the name or TIN for identification purposes. Also, the IRS will include the account number in future notices to you about backup withholding. If you use window envelopes and a reduced rate to mail statements to recipients, be sure the account number does not appear in the window. Otherwise, the Postal Service may not accept them for mailing.
Exception. Form 1098-T can have third party provider information.
Machine-printed forms should be printed using a 6 lines/inch option, and should be printed in 10 pitch pica (10 print positions per inch) or 12 pitch elite (12 print positions per inch). Proportional spaced fonts are unacceptable.
Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the size specified for a single sheet before they are filed with the IRS. The size specified does not include pin feed holes. Pin feed holes must not be present on forms filed with the IRS.
Use a felt tip marker. The machine used to “read” paper forms generally cannot read this ink type.
Use dollar signs ($), ampersands (&), asterisks (*), commas (,), or other special characters in the numbered money boxes.
Exception. Use decimal points to indicate dollars and cents (for example, 2000.00 is acceptable).
Fold Forms 1096, 1098, 1099, or 5498 mailed to the IRS. Mail these forms flat in an appropriately sized envelope or box. Folded documents cannot be readily moved through the machine used in IRS processing.
Staple Forms 1096 to the transmitted returns. Any staple holes near the return code number may impair the IRS's ability to machine scan the type of documents.
Type other information on Copy A.
Cut or separate the individual forms on the sheet of forms of Copy A (except Forms W-2G).
Mail completed paper forms to the IRS service center shown in the Instructions for Form 1096 and in the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G. Specific information needed to complete the forms mentioned in this revenue procedure are given in the specific form instructions. A chart is included in the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G giving a quick guide to which form must be filed to report a particular payment.
The following specifications give the format requirements for substitute Form W-2G (Copy A only), which is filed with the IRS.
A filer may use a substitute Form W-2G to file with the IRS (referred to as “substitute Copy A”). The substitute form must be an exact replica of the official form with respect to layout and content.
You must follow these specifications when printing substitute Copy A of the Form W-2G.
|Item||Substitute Form W-2G (Copy A)|
|Paper Color and Quality||Paper for Copy A must be white chemical wood bond, or equivalent, 20 pound (basis 17 x 22-500), plus or minus 5 percent. The paper must consist substantially of bleached chemical wood pulp. It must be free from unbleached or ground wood pulp or post-consumer recycled paper. It also must be suitably sized to accept ink without feathering.|
|Ink Color and Quality||All printing must be in a high quality nongloss black ink.|
|Typography||The type must be substantially identical in size and shape to the official form. All rules on the document are either 1/2 point (.007 inch), 1 point (0.015 inch), or 3 point (0.045). Vertical rules must be parallel to the left edge of the document, horizontal rules to the top edge.|
|Dimensions||The official form is 8 inches wide x 32/3 inches deep, exclusive of a 2/3 inch snap stub on the left side of the form. Any substitute Copy A must be the same dimensions. The snap feature is not required on substitutes. All margins must be free of print. The top and right margins must be 1/4 inch plus or minus .0313. If the top and right margins are properly aligned, the left margin for all forms will be correct. If the substitute forms are in continuous or strip form, they must be burst and stripped to conform to the size specified for a single form.|
|Hot Wax and Cold Carbon Spots||Hot wax and cold carbon spots are not permitted on any of the internal form plies. These spots are permitted on the back of a mailer top envelope ply. Interleaved carbons, if used, should be black and of good quality to avoid smudging.|
|Printer's Symbol||The Government Printing Office (GPO) symbol must not be printed on substitute Forms W-2G. Instead, the employer identification number (EIN) of the forms printer must be printed in the bottom margin on the face of each individual Copy A on a sheet. The form must not contain the statement “IRS approved” or any similar statement.|
|Catalog Number||The Catalog Number (Cat. No.) shown on Form W-2G is used for IRS distribution purposes and need not be printed on any substitute forms.|
If you do not use the official IRS form to furnish statements to recipients, you must furnish an acceptable substitute statement. To be acceptable, your substitute statement must comply with the rules in this section. If you are furnishing a substitute form, see Regulations sections 1.6042-4, 1.6044-5, 1.6049-6, and 1.6050N-1 to determine how the following statements must be provided to recipients (statement mailing requirements for most Forms 1099-DIV and 1099-INT, all Forms 1099-OID and 1099-PATR, and Form 1099-MISC or 1099-S for royalties). However, all information returns may be furnished electronically with the consent of the recipient. See Section 4.5.1.
Note. A trustee of a grantor-type trust may choose to file Forms 1099 and furnish a statement to the grantor under Regulations sections 1.671-4(b)(2)(iii) and (b)(3)(ii). The statement required by those regulations is not subject to the requirements outlined in this section.
The rules in this section apply to Form 1099-INT (except for interest reportable under section 6041), 1099-DIV (except for section 404(k) dividends), 1099-OID, and 1099-PATR only. You may furnish form recipients with Copy B of the official Form 1099 or a substitute Form 1099 (form recipient statement) if it contains the same language as the official IRS form (such as aggregate amounts paid to the form recipient, any backup withholding, the name, address, and TIN of the person making the return, and any other information required by the official form). Except for state income tax withholding information, information not required by the official form should not be included on the substitute form.
You may enter a total of the individual accounts listed on the form only if they have been paid by the same payer. For example, if you are listing interest paid on several accounts by one financial institution on Form 1099-INT, you may also enter the total interest amount. You may also enter a date next to the corrected box if that box is checked.
A substitute form recipient statement for Forms 1099-INT, 1099-DIV, 1099-OID, or 1099-PATR must comply with the following requirements:
Box captions and numbers that are applicable must be clearly identified, using the same wording and numbering as on the official form.
Note. For Form 1099-INT, if box 3 is not on your substitute form, you may drop “not included in box 3” from the box 1 caption.
The form recipient statement (Copy B) must contain all applicable form recipient instructions provided on the front and back of the official IRS form. Those instructions may be provided on a separate sheet of paper.
The form recipient statement must contain the following in bold and conspicuous type:
This is important tax information and is being furnished to the Internal Revenue
Service. If you are required to file a return, a negligence penalty or other sanction
may be imposed on you if this income is taxable and the IRS determines that it has
not been reported.
The box caption “Federal income tax withheld” must be in boldface type on the form recipient statement.
The form recipient statement must contain the Office of Management and Budget (OMB) number as shown on the official IRS form. See Part 5.
The form recipient statement must contain the tax year (for example, 2004), form number (for example, Form 1099-INT), and form name (for example, Interest Income) of the official IRS Form 1099. This information must be displayed prominently together in one area of the statement. For example, the tax year, form number, and form name could be shown in the upper right part of the statement. Each copy must be appropriately labeled (such as Copy B, For Recipient). See Section 4.4 for applicable labels and arrangement of assembly of forms.
Note. Do not include the words “Substitute for” or “In lieu of” on the form recipient statement.
Layout and format of the form is at the discretion of the filer. However, the IRS encourages the use of boxes so that the statement has the appearance of a form and can be easily distinguished from other nontax statements.
Each recipient statement of Forms 1099-DIV, 1099-INT, 1099-OID, and 1099-PATR must include the direct access telephone number of an individual who can answer questions about the statement. Include that telephone number conspicuously anywhere on the recipient statement.
Until new regulations are issued, the IRS will not assess penalties for use of a logo (for example, the name of the payer in any typeface, font, or style, and/or a symbolic icon) or slogan on a recipient statement if the logo or slogan is used by the payer in the ordinary course of its trade or business. In addition, use of the logo or slogan must not make it less likely for a reasonable payee to recognize the importance of the statement for tax reporting purposes.
A mutual fund family may state separately on one document (for example, one piece of paper) the dividend income earned by a recipient from each fund within the family of funds as required by Form 1099-DIV. However, each fund and its earnings must be stated separately. The form must contain an instruction to the recipient that each fund's dividends and name, not the name of the mutual fund family, must be reported on the recipient's tax return. The form cannot contain an aggregate total of all funds. In addition, a mutual fund family may furnish a single statement (as a single filer) for Forms 1099-INT, 1099-DIV, and 1099-OID information. Each fund and its earnings must be stated separately. The form must contain an instruction to the recipient that each fund's earnings and name, not the name of the mutual fund family, must be reported on the recipient's tax return. The form cannot contain an aggregate total of all funds.
Statements to form recipients for Forms 1098, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-CAP, 1099-G, 1099-H, 1099-LTC, 1099-MISC, 1099-Q, 1099-R, 1099-S, 1099-SA, 5498, 5498-ESA, 5498-SA, W-2G, 1099-DIV (only for section 404(k) dividends reportable under section 6047), and 1099-INT (only for interest of $600 or more made in the course of a trade or business reportable under section 6041) can be copies of the official forms or an acceptable substitute. To be acceptable, a substitute form recipient statement must meet the following requirements.
The tax year, form number, and form name must be the same as the official form and must be displayed prominently together in one area on the statement. For example, they may be shown in the upper right part of the statement.
The filer's and the form recipient's identifying information required on the official IRS form must be included.
Each substitute recipient statement for Forms W-2G, 1098, 1098-E, 1098-T, 1099-A, 1099-B, 1099-CAP, 1099-DIV, 1099-G (excluding state and local income tax refunds), 1099-H, 1099-INT, 1099-LTC, 1099-MISC (excluding fishing boat proceeds), 1099-OID, 1099-PATR, 1099-Q, and 1099-S must include the direct access telephone number of an individual who can answer questions about the statement. Include the telephone number conspicuously anywhere on the recipient statement. Although not required, payers reporting on Forms 1099-C, 1099-R, 1099-SA, 5498, 5498-ESA, and 5498-SA are encouraged to furnish telephone numbers.
All applicable money amounts and information, including box numbers, required to be reported to the form recipient must be titled on the form recipient statement in substantially the same manner as those on the official IRS form. The box caption “Federal income tax withheld” must be in boldface type on the form recipient statement.
Exception. If you are reporting a payment as “Other income” in box 3 of Form 1099-MISC, you may substitute appropriate language for the box title. For example, for payments of accrued wages and leave to a beneficiary of a deceased employee, you might change the title of box 3 to “Beneficiary payments” or something similar.
Note. You cannot make this change on Copy A.
Note. If federal income tax is withheld and shown on Form 1099-R or W-2G, Copy B and Copy C must be furnished to the recipient. If federal income tax is not withheld, only Copy C of Form 1099-R and W-2G must be furnished. However, for Form 1099-R, instructions similar to those on the back of the official Copy B and Copy C of Form 1099-R must be furnished to the recipient. For convenience, you may choose to provide both Copies B and C of Form 1099-R to the recipient.
You must provide appropriate instructions to the form recipient similar to those on the official IRS form, to aid in the proper reporting on the form recipient's income tax return. For payments reported on Forms 1099-B, and 1099-CAP, the requirement to include instructions substantially similar to those on the official IRS form may be satisfied by providing form recipients with a single set of instructions for all Forms 1099-B and 1099-CAP statements required to be furnished in a calendar year.
If you use carbon to produce recipient statements, the quality of the carbon must meet the following standards:
All copies must be clearly legible,
All copies must be able to be photocopied, and
Fading must not diminish legibility and the ability to photocopy.
In general, black chemical transfer inks are preferred, but other colors are permitted if the above standards are met. Hot wax and cold carbon spots are not permitted on any of the internal form plies. The back of a mailer top envelope ply may contain these spots.
A mutual fund family may state separately on one document (for example, one piece of paper) the Form 1099-B information for a recipient from each fund as required by Form 1099-B. However, the gross proceeds, etc., from each transaction within a fund must be stated separately. The form must contain an instruction to the recipient that each fund’s (not the mutual fund family’s) name and amount must be reported on the recipient's tax return. The form cannot contain an aggregate total of all funds.
You may use a Uniform Settlement Statement (under the Real Estate Settlement Procedures Act of 1974 (RESPA)) for Form 1099-S. The Uniform Settlement Statement is acceptable as the written statement to the transferor if you include the legend for Form 1099-S in Section 4.3.2 and indicate which information on the Uniform Settlement Statement is being reported to the IRS on Form 1099-S.
For reporting state income tax withholding and state payments, you may add an additional box(es) to recipient copies as appropriate.
Note. You cannot make this change on Copy A.
On Copy C of Form 1099-LTC, you may reverse the location of the policyholder's and the insured's name, street address, city, state, and ZIP code for easier mailing.
If an institution insurer uses a third party service provider to file Form 1098-T, then in addition to the institution or insurers name, address, and telephone number, the same information may be included for the third party service provider in the space provided on the form.
Logos are permitted on substitute recipient statements for the forms listed in this section (Section 4.1.3).
A composite form recipient statement is permitted for reportable payments of interest, dividends, original issue discount, patronage dividends, and royalties (Forms 1099-INT (except for interest reportable under section 6041), 1099-DIV (except for section 404(k) dividends), 1099-MISC or 1099-S (for royalties only), 1099-OID, or 1099-PATR) when one payer is reporting more than one of these payments during a calendar year to the same form recipient. Generally, do not include any other Form 1099 information (for example, 1098 or 1099-A) on a composite statement with the information required on the forms listed in the preceding sentence.
Exception. A filer may include Form 1099-B information on a composite form with the forms listed above.
Although the composite form recipient statement may be on one sheet, the format of the composite form recipient statement must satisfy the following requirements in addition to the requirements listed earlier in Section 4.1.2.
All information pertaining to a particular type of payment must be located and blocked together on the form and separate from any information covering other types of payments included on the form. For example, if you are reporting interest and dividends, the Form 1099-INT information must be presented separately from the Form 1099-DIV information.
The composite form recipient statement must prominently display the tax year, form number, and form name of the official IRS form together in one area at the beginning of each appropriate block of information.
Any information required by the official IRS forms that would otherwise be repeated in each information block is required to be listed only once in the first information block on the composite form. For example, there is no requirement to report the name of the filer in each information block. This rule does not apply to any money amounts (for example, federal income tax withheld) or to any other information that applies to money amounts.
A composite statement is an acceptable substitute only if the type of payment and the recipient's tax obligation with respect to the payment are as clear as if each required statement were furnished separately on an official form.
A composite form recipient statement for the forms specified in Section 4.1.3 is permitted when one filer is reporting more than one type of payment during a calendar year to the same form recipient. A composite statement is not allowed for a combination of forms listed in Section 4.1.3 and forms listed in Section 4.1.2.
Substitute payments in lieu of dividends reported in Box 8 of Form 1099-MISC may be reported on a composite substitute statement with Form 1099-DIV.
Form 1099-B information may be reported on a composite form with the forms specified in Section 4.1.2 as described in Section 4.2.1.
Forms 1099-A and 1099-C transactions, if related, may be combined on Form 1099-C.
Royalties reported on Form 1099-MISC or 1099-S may be reported on a composite form only with the forms specified in Section 4.1.2.
Although the composite form recipient statement may be on one sheet, the format of the composite form recipient statement must satisfy the requirements listed in Section 4.2.1 as well as the requirements in Section 4.1.3. A composite statement of Forms 1098 and 1099-INT (for interest reportable under section 6049) is not allowed.
Form 1098 recipient statements (Copy B) must contain the following legends:
“The information in boxes 1, 2, and 3 is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for this mortgage interest or for these points or because you did not report this refund of interest on your return.”
“Caution. The amount shown may not be fully deductible by you. Limits based on the loan amount and the cost and value of the secured property may apply. Also, you may only deduct interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person.”
Form 1098-E -“This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for student loan interest.”
Form 1098-T -“This is important tax information and is being furnished to the Internal Revenue Service.”
Forms 1099-A, 1099-C, and 1099-CAP:
Copy B-“This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported.”
Forms 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-OID, 1099-PATR, and 1099-Q:
Copy B-“This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported.”
Copy B-“This is important tax information and is being furnished to the Internal Revenue Service.”
Copy B-“This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.”
Copy C-“Copy C is provided to you for information only. Only the policyholder is required to report this information on a tax return.”
Copy B-“Report this income on your federal tax return. If this form shows federal income tax withheld in box 4, attach this copy to your return.”
Copy C-“This information is being furnished to the Internal Revenue Service.”
Copy B-“This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.”
Copy B-“This information is being furnished to the Internal Revenue Service.”
Copy B-“This information is being furnished to the Internal Revenue Service. Report this income on your federal tax return. If this form shows federal income tax withheld in box 2, attach this copy to your return.”
Copy C-“This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported.”
Form 5498 recipient statements (Copy B) must contain the following legends:
Form 5498-“This information is being furnished to the Internal Revenue Service.”
Note. If you do not furnish another statement to the participant because no contributions were made for the year, the statement of the fair market value and any required minimum distribution, of the account must contain this legend and a designation of which information is being furnished to the IRS.
Form 5498-ESA -“The information in boxes 1 and 2 is being furnished to the Internal Revenue Service.”
Form 5498-SA -“The information in boxes 1 through 6 is being furnished to the Internal Revenue Service.”
Copies B, C, and in some cases, D, 1, and 2 are included in the official assembly for the convenience of the filer. You are not legally required to include all these copies with the privately printed substitute forms. Furnishing Copies B and, in some cases, C will satisfy the legal requirement to provide statements of information to form recipients.
Note. If an amount of federal income tax withheld is shown on Form 1099-R or W-2G, Copy B (to be attached to the tax return) and Copy C must be furnished to the recipient. Copy D (Forms 1099-R and W-2G) may be used for filer records. Only Copy A should be filed with the IRS.
Copy A (“For Internal Revenue Service Center”) of all forms must be on top. The rest of the assembly must be arranged, from top to bottom, as follows. For:
Form 1098 - Copy B “For Payer”; Copy C “For Recipient.”
Form 1098-E - Copy B “For Borrower”; Copy C “For Recipient.”
Form 1098-T - Copy B “For Student”; Copy C “For Filer.”
Form 1099-A - Copy B “For Borrower”; Copy C “For Lender.”
Forms 1099-B, 1099-DIV, 1099-G, 1099-H, 1099-INT, 1099-OID, 1099-PATR, 1099-Q, and 1099-SA - Copy B “For Recipient”; Copy C “For Payer.”
Form 1099-C - Copy B “For Debtor”; Copy C “For Creditor.”
Form 1099-CAP - Copy B “For Shareholder”; Copy C “For Corporation.”
Form 1099-LTC - Copy B “For Policyholder”; Copy C “For Insured”; and Copy D “For Payer.”
Form 1099-MISC - Copy 1 “For State Tax Department”; Copy B “For Recipient”; Copy 2 “To be filed with recipient’s state income tax return, when required”; and Copy C “For Payer.”
Form 1099-R - Copy 1 “For State, City, or Local Tax Department”; Copy B “Report this income on your federal tax return. If this form shows federal income tax withheld in box 4, attach this copy to your return”; Copy C “For Recipient’s Records”; Copy 2 “File this copy with your state, city, or local income tax return, when required”; Copy D “For Payer.”
Form 1099-S - Copy B “For Transferor”; Copy C “For Filer.”
Form 5498 - Copy B “For Participant”; Copy C “For Trustee or Issuer.”
Form 5498-ESA - Copy B “For Beneficiary”; Copy C “For Trustee.”
Form 5498-SA - Copy B “For Participant”; Copy C “For Trustee.”
Form W-2G - Copy 1 “For State Tax Department”; Copy B “Report this income on your federal tax return. If this form shows federal income tax withheld in box 2, attach this copy to your return”; Copy C “For Winner’s Records”; Copy 2 “Attach this copy to your state income tax return, if required.”; Copy D “For Payer.”
If you are required to furnish a written statement (Copy B or an acceptable substitute) to a recipient, then you may furnish the statement electronically instead of on paper. This includes furnishing the statement to recipients of Forms 1098, 1098-E, 1098-T, 1099-A, B, C, CAP, DIV, H, INT, G, LTC, MISC, OID, PATR, Q, R, S, SA, 5498, 5498-ESA, and 5498-SA. It also includes Form W-2G (except for horse and dog racing, jai alai, sweepstakes, wagering pools, and lotteries).
If you meet the requirements listed below, you are treated as furnishing the statement timely.
The recipient must consent in the affirmative and not have withdrawn the consent before the statement is furnished. The consent by the recipient must be made electronically in a way that shows that he or she can access the statement in the electronic format in which it will be furnished.
You must notify the recipient of any hardware or software changes prior to furnishing the statement. A new consent to receive the statement electronically is required after the new hardware or software is put into service.
Prior to furnishing the statements electronically, you must provide the recipient a statement with the following statements prominently displayed:
If the recipient does not consent to receive the statement electronically, a paper copy will be provided.
The scope and duration of the consent. For example, whether the consent applies to every year the statement is furnished or only for the January 31 immediately following the date of the consent.
How to obtain a paper copy after giving consent.
How to withdraw the consent. The consent may be withdrawn at any time by furnishing the withdrawal in writing (electronically or on paper) to the person whose name appears on the statement. Confirmation of the withdrawal also will be in writing (electronically or on paper).
Notice of termination. The notice must state under what conditions the statements will no longer be furnished to the recipient.
Procedures to update the recipient’s information.
A description of the hardware and software required to access, print and retain a statement, and a date the statement will no longer be available on the website.
Additionally, you must:
Ensure the electronic format contains all the required information and complies with the guidelines in this document.
Post, on or before the January 31 due date, the applicable statement on a website accessible to the recipient through October 15 of that year.
Inform the recipient, electronically or by mail, of the posting and how to access and print the statement.
For more information, see Regulations section 31.6051-1. For electronic furnishing of Forms 1098-E and 1098-T, see Regulations section 1.6050S-2. For electronic furnishing of Forms 1099-R, 1099-SA, 1099-Q, 5498, 5498-ESA, and 5498-SA, see Notice 2004-10, 2004-6 I.R.B. 433.
Paper substitutes of Copy A for Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, that totally conform to the specifications contained in this procedure may be privately printed without prior approval from the Internal Revenue Service. Proposed substitutes not conforming to these specifications must be submitted for consideration.
Note. Copies B, C, D, and E of Form 1042-S may contain multiple income entries for the same recipient, that is multiple rows of the top boxes 1-8 of the Form.
The request should be submitted by November 15 of the year prior to the year the form is to be used. This is to allow the Service adequate time to respond and the submitter adequate time to make any corrections. These requests should contain a copy of the proposed form, the need for the specific deviation(s), and the number of information returns to be printed.
Form 1042-S is subject to annual review and possible change. Withholding agents and form suppliers are cautioned against overstocking supplies of the privately printed substitutes.
Copies of the official form for the reporting year may be obtained from most Service offices. The Service provides only cut sheets (no carbon interleaves) of these forms. Continuous fan-fold/pin-fed forms are not provided.
Instructions for withholding agents:
Only original copies may be filed with the Service. Carbon copies and reproductions are not acceptable.
The term “Recipient’s U.S. TIN” for an individual means the social security number (SSN) or IRS individual taxpayer identification number (ITIN), consisting of nine digits separated by hyphens as follows: 000-00-0000. For all other recipients, the term means employer identification number (EIN) or qualified intermediary employer identification number (QI-EIN). The QI-EIN designation includes a withholding foreign partnership employer identification number (WP-EIN) and a withholding foreign trust employer identification number (WT-EIN). The EIN and QI-EIN consist of nine digits separated by a hyphen as follows: 00-0000000. The taxpayer identification number (TIN) must be in one of these formats.
Withholding agents are requested to type or machine print whenever possible, provide quality data entries on the forms (that is, use black ribbon and insert data in the middle of blocks well separated from other printing and guidelines), and take other measures to guarantee a clear, sharp image. Withholding agents are not required, however, to acquire special equipment solely for the purpose of preparing these forms.
The “VOID,” “CORRECTED,” and “PRO-RATA BASIS REPORTING” boxes must be printed at the top center of the form under the title and checked, if applicable.
Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the size specified for a single form before they are filed with the Service. The dimensions are found below. Computer cards are acceptable provided they meet all requirements regarding layout, content, and size.
|Property||Substitute Form 1042-S Format Requirements|
|Printing||Privately printed substitute Forms 1042-S must be exact replicas of the official forms with respect to layout and content. Only the dimensions of the substitute form may differ. The Government Printing Office (GPO) symbol must be deleted. The exact dimensions are found below.|
|Box Entries||Only one item of income may be represented on the copy submitted to the Service (Copy A). Multiple income items may be shown on copies provided to recipients or retained by withholding agent. All boxes appearing on the official form must be present on the substitute form, with appropriate captions.|
|Color and Quality of Ink||All printing must be in high quality non-gloss black ink. Bar codes should be free from picks and voids.|
|Typography||Type must be substantially identical in size and shape to corresponding type on the official form. All rules on the document are either 1 point (0.015") or 3 point (0.045"). Vertical rules must be parallel to the left edge of the document; horizontal rules must be parallel to the top edge.|
|Carbons||Carbonized forms or “spot carbons” are not permissible. Interleaved carbons, if used, must be of good quality to preclude smudging and should be black.|
|Assembly||If all five parts are present, the parts of the assembly shall be arranged from top to bottom as follows: Copy A (Original) “for Internal Revenue Service,” Copies B, C, and D “for Recipient,” and Copy E “for Withholding Agent.”|
|Color Quality of Paper||•||Paper for Copy A must be white chemical wood bond, or equivalent, 20 pound (basis 17 x 22-500), plus or minus 5 percent; or offset book paper, 50 pound (basis 25 x 38-500). No optical brighteners may be added to the pulp or paper during manufacture. The paper must consist of principally bleach chemical wood pulp or recycled printed paper. It also must be suitably sized to accept ink without feathering.|
|•||Copies B, C, D (for Recipient), and E (For Withholding Agent) are provided in the official assembly solely for the convenience of the withholding agent. Withholding agents may choose the format, design, color, and quality of the paper used for these copies.|
|Dimensions||•||The official form is 8 inches wide x 51/2 inches deep, exclusive of a 1/2 inch snap stub on the left side of the form. The snap feature is not required on substitutes.|
|•||The width of a substitute Copy A must be a minimum of 7 inches and a maximum of 8 inches, although adherence to the size of the official form is preferred. If the width of substitute Copy A is reduced from that of the official form, the width of each field on the substitute form must be reduced proportionately. The left margin must be 1/2 inch and free of all printing other than that shown on the official form.|
|•||The depth of a substitute Copy A must be a minimum of 51/6 inches and a maximum of 51/2 inches.|
|Other Copies||Copies B, C, and D must be furnished for the convenience of payees who must send a copy of the form with other federal and state returns they file. Copy E may be used as a withholding agent's record/copy.|
The Paperwork Reduction Act (the Act) of 1995 (Public Law 104-13) requires that:
OMB approves all IRS tax forms that are subject to the Act. Each IRS form contains (in or near the upper right corner) the OMB approval number, if any. (The official OMB numbers may be found on the official IRS printed forms and are also shown on the forms in the exhibits in Part 6.)
Each IRS form (or its instructions) states:
Why the IRS needs the information,
How it will be used, and
Whether or not the information is required to be furnished to the IRS.
This information must be provided to any users of official or substitute IRS forms or instructions.
The OMB requirements for substitute IRS forms are:
Any substitute form or substitute statement to a recipient must show the OMB number as it appears on the official IRS form.
For Copy A, the OMB number must appear exactly as shown on the official IRS form.
For any copy other than Copy A, the OMB number must use one of the following formats.
OMB No. XXXX-XXXX (preferred) or
OMB # XXXX-XXXX (acceptable).
All substitute forms (Copy A only) must state “For Privacy Act and Paperwork Reduction Act Notice, see the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G.” (or “For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.” for Copy A of Form 1042-S).
If no instructions are provided to users of your forms, you must furnish them with the exact text of the Privacy Act and Paperwork Reduction Act Notice.
You can order official IRS forms and information copies of federal tax materials by calling the IRS Distribution Center at 1-800-829-3676. Other ways to get federal tax material include:
GPO Superintendent of Documents Bookstores.
Note. Several IRS forms are provided electronically on the IRS home page and on the Federal Tax Forms CD-ROM, but Copy A of Forms 1096, the 1098 series, 1099 series, and 5498 series cannot be used for filing with the IRS when printed from a conventional printer. These forms contain drop-out ink requirements as described in Part 2 of this publication.
You can download tax materials from the Internet.
|You Can Access the Internet by...||Using...|
|File Transfer Protocol (FTP)||ftp.irs.gov|
|World Wide Web||www.irs.gov|
The IRS also offers an alternative to downloading electronic files and provides current and prior-year access to tax forms and instructions through its Federal Tax Forms CD-ROM. The CD, Pub. 1796, Federal Tax Products on CD-ROM, will be available for the upcoming filing season. You may buy the CD-ROM on the Internet at www.irs.gov/cdorders or by calling 1-877-CDFORMS (1-877-233-6767).
Exhibits A through Y illustrate some of the specifications that were discussed earlier in this revenue procedure. The dimensions apply to the actual size forms, but the exhibits have been reduced in size.
Generally, the illustrated dimensions apply to all like forms. For example, Exhibit B shows 11.00" from the top edge to the bottom edge of Form 1098 and .85" between the bottom rule of the top form and the top rule of the second form on the page. These dimensions apply to all forms that are printed three to a page.
Keep in mind the following guidelines when printing substitute forms.
Closely follow the specifications to avoid delays in processing the forms.
Always use the specifications as outlined in this revenue procedure and illustrated in the exhibits.
Do not add the text line “Do Not Cut or Separate Forms on This Page” to the bottom form. This will cause inconsistency with the specifications.
Exhibit A. 2004 Form 1096, Annual Summary and Transmittal of U.S. Information Returns.
Exhibit B. Copy A of 2004 Form 1098, Mortage Interest Statement.
Exhibit C. Copy A of 2004 Form 1098-E, Student Loan Interest Statement.
Exhibit D. Copy A of 2004 Form 1098-T, Tuition Statement.
Exhibit E. Copy A of 2004 Form 1099-A, Acquisition or Abandonment of Secured Property.
Exhibit F. Copy A of 2004 Form 1099-B, Proceeds From Broker and Barter Exchange Transactions.
Exhibit G. Copy A of 2004 Form 1099-C, Cancellation of Debt.
Exhibit H. Copy A of 2004 Form 1099-CAP, Changes in Corporate Control and Capital Structure.
Exhibit I. Copy A of 2004 Form 1099-DIV, Dividends and Distributions.
Exhibit J. Copy A of 2004 Form 1099-G, Certain Government Payments.
Exhibit K. Copy A of 2004 Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments.
Exhibit L. Copy A of 2004 Form 1099-INT, Interest Income.
Exhibit M. Copy A of 2004 Form 1099-LTC, Long-Term Care and Accelerated Death Benefits.
Exhibit N. Copy A of 2004 Form 1099-MISC, Miscellaneous Income.
Exhibit O. Copy A of 2004 Form 1099-OID, Original Issue Discount.
Exhibit P. Copy A of 2004 Form 1099-PATR, Taxable Distributions Received From Cooperatives.
Exhibit Q. Copy A of 2004 Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and 530).
Exhibit R. Copy A of 2004 Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Exhibit S. Copy A of 2004 Form 1099-S, Proceeds From Real Estate Transactions.
Exhibit T. Copy A of 2004 Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare+Choice MSA.
Exhibit U. Copy A of 2004 Form 5498, IRA Contribution Information.
Exhibit V. Copy A of 2004 Form 5498-ESA, Coverdell ESA Contribution Information.
Exhibit W. Copy A of 2004 Form 5498-SA, HSA, Archer MSA, or Medicare+Choice MSA Information.
Exhibit X. Copy A of 2004 Form W-2G, Certain Gambling Winnings.
Exhibit Y. Copy A of 2004 Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding.
The following is a list of entities that have been approved by the Commissioner of the Internal Revenue Service, pursuant to §1.408-2(e) of the Income Tax Regulations, to serve as a nonbank trustee or custodian. This list updates and supercedes the list published with Announcement 2003-54, 2003-40 I.R.B. 761.
Archer medical savings accounts (Archer MSAs) established under § 220 of the Internal Revenue Code, health savings accounts described in §223, custodial accounts of retirement plans qualified under § 401, custodial accounts described in § 403(b)(7), trust or custodial accounts of individual retirement accounts (IRAs) established under §§ 408 and 408A (Roth IRAs), Coverdell education savings accounts described in §530, and custodial accounts of eligible deferred compensation plans described in § 457(b) will not be tax exempt if the trustee or custodian of such accounts is not a bank (as defined in § 408(n)) (and in the case of Archer MSAs and health savings accounts, a bank within the meaning of § 408(n) or an insurance company within the meaning of § 816) or an approved nonbank trustee or custodian.
An entity that is not a bank (as defined in § 408(n)) (and in the case of Archer MSAs and health savings accounts a bank within the meaning of § 408(n) or an insurance company within the meaning of § 816) must receive approval from the Service to serve as a nonbank trustee or nonbank custodian. A prospective nonbank trustee or custodian must file a written application with the Commissioner of Internal Revenue demonstrating that the requirements of § 1.408-2(e)(2) through § 1.408-2(e)(7) of the regulations will be met. If the application is approved, a written notice of approval will be issued to the applicant. The notice of approval will state the day on which it becomes effective, and (except as otherwise provided therein) will remain effective until revoked by the Service or withdrawn by the applicant. Entities that have received such approval from the Service may also sponsor certain retirement plans, custodial accounts under § 403(b)(7) and individual retirement arrangements established under §§ 408 and 408A. (See Rev. Proc. 2000-20, 2000-1 C.B. 553, and Rev. Proc. 87-50, 1987-2 C.B. 647, as modified.)
A prospective nonbank trustee or custodian may not accept any fiduciary account before such notice of approval becomes effective. In addition, a nonbank trustee or custodian may not accept a fiduciary account until after the plan administrator or the person for whose benefit the account is to be established is furnished with a copy of the written notice of approval issued to the applicant.
The continued reliance on a notice of approval is dependent upon the continued satisfaction of the nonbank trustee requirements set forth in the regulations. The notice of approval issued to an applicant will be revoked if the Commissioner determines that the applicant is unwilling or unable to administer fiduciary accounts in a manner consistent with the requirements of the regulations. Generally, the notice will not be revoked unless the Commissioner determines that the applicant has knowingly, willfully, or repeatedly failed to administer fiduciary accounts in a manner consistent with the requirements of the regulations, or has administered a fiduciary account in a grossly negligent manner.
The written notice of approval to serve as a nonbank trustee or nonbank custodian is not an endorsement of any investment made with respect to any retirement plan or arrangement handled by the approved nonbank trustee or custodian. The Internal Revenue Service does not review or approve investments.
If the trustee or custodian of an account described above is not a bank (and in the case of Archer MSAs and health savings accounts, a bank or an insurance company) or an approved nonbank trustee or nonbank custodian, the amounts held in such account (including earned interest) will be deemed distributed and includible in gross income in the year(s) the account’s trustee or custodian was not a bank or, if applicable, an insurance company, or an approved nonbank trustee or nonbank custodian. Contributions made to such account are not deductible from gross income and will be disallowed if claimed on an income tax return.
This list of approved nonbank trustees and nonbank custodians includes their names, addresses, and the date each application was approved.
If an approved nonbank trustee or custodian believes that the information about it is incorrect, incomplete, or that it has been incorrectly omitted from this list, it may, on or before December 11, 2004, which is 60 days from the date of the publication of this list in the Internal Revenue Bulletin, notify the Service in writing of any changes it proposes to the list. This notification should include a copy of the notice of approval.
The notification should be addressed to:Internal Revenue Service
1111 Constitution Ave., NW
Washington, DC 20224
The principal author of this announcement is Calvin Thompson of the Employee Plans, Tax Exempt and Government Entities Division. Please contact Mr. Thompson at 1-202-283-9596 (not a toll-free number), if there are any questions regarding the publication of this list. Written inquiries concerning this announcement should be addressed to the Internal Revenue Service at the above address.
|APPROVED Nonbank Trustees/Custodians as of December 31, 2003|
|1.||A.B. Culbertson & Co.||1250 Continental Plaza Fort Worth, TX 76102||May 15, 1984|
|2.||A.G. Becker & Co.||Chicago, IL||December 12, 1979|
|3.||A.G. Edwards & Sons, Inc.||One North Jefferson St. Louis, MO 63103||November 26, 1980|
|4.||ABN AMRO Securities LLC||55 East 52nd Street New York, NY 10022||September 7, 2000|
|5.||Adler, Coleman Clearing Corp.||20 Broad St. New York, NY 10005||April 7, 1987|
|6.||Advest, Inc.||280 Trumbull Street Hartford, CT 06103||January 24, 1989|
|7.||Aisel & Co.||20 Broad Street New York, NY 10005||April 26, 1991|
|8.||American Brokerage Services, Inc.||131 Lafayette Ave. Detroit, MI 48226||September 18, 1991|
|9.||American Capital Marketing, Inc. (FKA American General Capital)||2777 Allen Parkway Houston, TX 77215||June 25, 1984|
|10.||American Express Financial Corp.||200 AXP Financial Center Minneapolis, MN 55474||August 12, 1977|
|11.||American Heritage Life Ins. Co.||76 South Laura Street Jacksonville, FL 32202||December 11, 1984|
|12.||American Transtech, Inc.||8000 Baymeadows Way Jacksonville, FL 32256||August 15, 1990|
|13.||Ameritrade, Inc.||4211 South 102nd Street Omaha, NE 68127-1031||April 18, 1984|
|14.||Analytic Investment Management, Inc.||2222 Martin Street, Suite 230 Irvine, CA 92715-1454||May 9, 1989|
|15.||Aspen Partnership||1895 Claremont Road Hoffman Estates, IL 60195||October 25, 1990|
|16.||B.C. Ziegler & Co.||215 North Main Street West Bend, WI 53095||September 27, 1985|
|17.||Banc of America Securities LLC||100 North Tryon Street NC 1-007-20-01 Charlotte, NC 28255||April 30, 2003|
|18.||Banc One Capital Corporation||P.O. Box 18277 90 North High Street Columbus, OH 43218||February 24, 1992|
|19.||Bank Hapoulim B.M.||6501 Wilshire Blvd. Los Angeles, CA 90048||May 15, 1986|
|20.||Bank Julius Baer & Co., LTD||330 Madison Avenue New York, NY 10017||December 15, 1988|
|21.||Bank Leumi Le - Israel B.N. Western Hemisphere Regional Mgt.||242 Fifth Avenue New York, NY 10022||February 10, 1982|
|22.||Bartlett & Co.||36 East Fourth Street Cincinnati, OH 45202||February 1, 1989|
|23.||Bear, Stearns & Co., Inc.||5 Hanover Square New York, NY 10004||June 2, 1986|
|24.||Bear, Sterns Securities Corp.||2 Broadway, 12th Floor New York, NY 10004||June 24, 1991|
|25.||Berklee College of Music, Inc.||1140 Boylston Street Boston, MA 02110||May 9, 1989|
|26.||Blunt Ellis & Loewi, Inc.||225 East Mason Street Milwaukee, WI 53202||January 25, 1982|
|27.||BNY Clearing Services, LLC (FKA Kemper Clearing Corporation)||111 East Kilbourn Ave. Milwaukee, WI 53202||August 21, 1989|
|28.||Boettcher & Company, Inc.||828 Seventeenth Street Denver, CO 80201||August 10, 1987|
|29.||Brown & Company Securities Corporation||20 Winthrop Square Boston, MA 02110||February 27, 1985|
|30.||Bruns, Nordeman, Rea & Co.||New York, NY||October 31, 1977|
|31.||Burke, Christensen & Lewis Securities, Inc.||120 S. La Salle Street Suite 940 Chicago, IL 60603||March 11, 1986|
|32.||Burton J. Vincent, Chesley & Co.||105 West Adams Street Chicago, IL 60603||March 25, 1982|
|33.||Butler Wick & Co., Inc.||City Center One Bldg. Youngstown, OH 44501||October 8, 1992|
|34.||BUYandHold Securities Corporation||110 Wall Street New York, NY 10005||October 5, 2000|
|35.||Carolina Securities Corp.||239 Fayetteville St. Mall Raleigh, NC 27602||August 29, 1983|
|36.||Chapin, Davis & Company, Inc.||3 Village Square, Cross Keys Baltimore, MD 21210||December 7, 1983|
|37.||Charles Schwab & Co., Inc.||101 Montgomery Street San Francisco, CA 94104||January 8, 1982|
|38.||Christian & Missionary Alliance||P.O. Box C Nyack, NY 10960||August 15, 1985|
|39.||CIBC World Markets Corporation||200 Liberty Street New York, NY 10281||July 26, 1977|
|40.||Citigroup Global Markets, Inc.||388 Greenwich St. New York, NY 10105||July 22, 1985|
|41.||City Securities Corp.||135 North Pennsylvania Street Indianapolis, IN 46204||December 21, 1982|
|42.||Commerce First Thrift||Midvale, UT 84047||May 25, 1978|
|43.||Comprehensive Investment Services, Inc.||One Moody Plaza Galveston, TX 77550||June 16, 2000|
|44.||Continental Trust Co.||17110 Dallas Parkway Suite 200 Dallas, TX 75248||February 22, 1977|
|45.||D. A. Davidson & Co.||Davidson Building #8 Third Street North Great Falls, MT 59403||June 11, 1982|
|46.||D.J. St. Germain, Inc.||1500 Main Street Springfield, MA 01115||January 1, 1977|
|47.||Davenport & Co. of Virginia, Inc.||901 E. Cary Street Richmond, VA 23219||February 2, 1987|
|48.||Davenport & Company LLC||901 East Cary Street Richmond, VA 23219||March 31, 1997|
|49.||Deutsche Bank Securities Corp. d.b.a. C.J. Lawrence Deutsche||1290 Avenue of the Americas New York, NY 10104||March 14, 1980|
|50.||Deutsche Bank Securities, Inc.||1 South Street Baltimore, MD 21203||April 11, 1994|
|51.||Donaldson, Lufkin & Jenrette Securities Corp.||140 Broadway New York, NY 10005||December 4, 1985|
|52.||Dougherty, Dawkins, Strand & Yost, Inc.||100 South Fifth Street Suite 2300 Minneapolis, MN 55402||February 22, 1986|
|53.||Dresdner Kleinwort Wasserstein Securities LLC||75 Wall Street New York, NY 10005||October 9, 2002|
|54.||Dreyfus Investment Services Corp.||Two Mellon Bank Center Pittsburgh, PA 15259||May 18, 1989|
|55.||Duncan-Williams, Inc.||5860 Ridgeway Center Parkway Memphis, TN 38120||December 13, 1995|
|56.||E*Trade Clearing LLC||10951 White Rock Road Rancho Cardova, CA 95670||September 3, 2002|
|57.||E*Trade Securities LLC||4500 Bohannon Drive Menlo Park, CA 94025||August 30, 2002|
|58.||E*Trade Securities, Inc.||480 California Avenue Palo Alto, CA 94306||February 1, 1996|
|59.||Eads Generoe Trust||St. Louis, MO||February 3, 1977|
|60.||Edward D. Jones & Co.||201 Progress Parkway Maryland Height, MO 63043||May 30, 1985|
|61.||El Paso Electric Co.||P.O. Box 982 El Paso, TX 79960||June 15, 1983|
|62.||Elan Investment Services, Inc.||777 East Wisconsin Avenue Milwaukee, WI 53282||December 21, 1987|
|63.||Emmett A. Larkin Co., Inc.||100 Bush Street San Francisco, CA 94104||April 17, 1986|
|64.||Eppler, Guerin & Turner, Inc.||2001 Bryan Tower, Suite 2300 Dallas, TX 75201||September 6, 1984|
|65.||EVEREN Securities, Inc.||77 West Wacker Drive Chicago, IL 60601-1694||November 19, 1998|
|66.||Fahnestock & Co., Inc. (FKA Edward A. Viner & Co.)||110 Wall Street New York, NY 10005||April 15, 1982|
|67.||Fechtor, Detwiler & Co., Inc.||155 Federal Street Boston, MA 02110||March 26, 1982|
|68.||Ferris, Baker Watts, Inc. (FKA Ferris & Company)||1720 Eye Street, NW Washington, DC 20006||December 4, 1987|
|69.||Fiduciary Services Corporation||310 Commercial Drive Savannah, GA 31406||October 2, 2003|
|70.||Financial Data Services, Inc.||400 Atrium Drive Somerset, NJ 08873||November 14, 1990|
|71.||First Albany Corp.||41 State Street Albany, NY 12207||September 26, 1979|
|72.||First Clearing Corporation||10700 Wheat First Drive Glen Allen, VA 23060||April 21, 1999|
|73.||First Clearing, LLC (FKA) First Clearing Corporation||10700 Wheat First Drive Glen Allen, VA 23060||May 30, 2003|
|74.||First Illinois Capital Corp.||424 7th Street Plaza 7 Rockford, IL 61110||May 27, 1982|
|75.||First Manhattan Co.||437 Madison Avenue New York, NY 10022||January 26, 1990|
|76.||First of Michigan Corporation||100 Renaissance Center 26th Floor Detroit, MI 48243||August 31, 1994|
|77.||Fiserv Securities, Inc.||One Commerce Square 2005 Market Street Philadelphia, PA 19103||November 15, 1984|
|78.||Fleet Clearing Corporation||67 Wall Street New York, NY 10005||December 3, 1986|
|79.||Fleet Norstar Securities, Inc.||14 Wall Street New York, NY 10005||August 30, 1991|
|80.||Folger, Nolan, Fleming & Douglass||725 15th Street, N.W. Washington, DC 20015||September 16, 1981|
|81.||Freedom Capital Management Corporation||One Beacon Street Boston, MA 02108||August 29, 1991|
|82.||Freeman Welwood & Co., Inc.||1501 Fourth Avenue Suite 1700 Seattle, WA 98101||February 13, 1996|
|83.||G.T. Global Investors Services, Inc.||50 California Street San Francisco, CA 94111||May 27, 1994|
|84.||General Conference of the Mennonite Brethren Churches Board of Trustees||315 South Lincoln Hillsboro, KS 67063||March 8, 1983|
|85.||Goldman, Sachs & Co.||85 Broad Street New York, NY 10004||December 8, 1982|
|86.||Greek Catholic Union of the U.S.A.||5400 Tuscarawas Rd. Beaver, PA 15009-9513||May 24, 2000|
|87.||Gruntal & Co, Inc.||14 Wall Street New York, NY 10005||June 13, 1984|
|88.||H&R Block Financial Advisors, Inc.||735 Griswold Street Detroit, MI 48226||December 8, 1983|
|89.||H.G. Wellington & Co, Inc.||14 Wall Street New York, NY 10005||September 13, 1993|
|90.||H.M. Payson & Co.||One Portland Square P.O. Box 31 Portland, ME 04112||August 20, 1987|
|91.||Halpert and Company, Inc.||284 Millburn Avenue Millburn, NJ 07041||April 17, 1996|
|92.||Hamilton Investments, Inc. (FKA Illinois Company, Inc.)||30 North La Salle Street Chicago, IL 60602||August 6, 1982|
|93.||Hampshire Funding, Inc.||One Granite Place P.O. Box 2005 Concord, NH 03301||May 26, 1988|
|94.||Hanifen, Imhoff Clearing Corp.||1125 17th Street Denver, CO 80217||April 22, 1997|
|95.||Hanifen, Imhoff, Inc.||1125 17th Street, Suite 1700 Denver, CO 80202||December 3, 1985|
|96.||Harris Investor Services LLC||Harborside Financial Center 501 Plaza II Jersey City, NJ 07311||May 1, 2002|
|97.||Hartford Life Insurance Co.||Hartford Plaza Hartford, CT 06106||March 3, 1982|
|98.||Hazlett, Burt & Watson, Inc.||1300 Chapline Street Wheeling, WV 26003||April 11, 1995|
|99.||Heartland Securities, Inc.||208 South LaSalle Street Chicago, IL 60604||March 6, 1984|
|100.||Henry Scott, Inc.||Philadelphia, PA||March 23, 1982|
|101.||Herzfeld & Stern, Inc.||30 Broad Street New York, NY 10004||December 12, 1984|
|102.||Herzog, Heine, Geduld, Inc.||26 Broadway New York, NY 10004||February 11, 1982|
|103.||Holt & Collins||188 Embarcadero Suite 760 San Francisco, CA 94105||September 8, 1988|
|104.||Home Life Financial Assurance Corporation||2400 West Bay Drive Largo, FL 33540||November 13, 1986|
|105.||Howard, Weil, Labouisse, Friedrichs, Inc.||1100 Paydrus Street Suite 900 New Orleans, LA 70163||December 28, 1987|
|106.||Howe Barnes Investments, Inc.||135 S. LaSalle Street Chicago, IL 60603||July 6, 1994|
|107.||Huntleigh Securities Corporation||222 South Central Avenue St. Louis, MO 63102||October 22, 1997|
|108.||I.M. Simon & Co.||7730 Forsyth Blvd. Clayton, MO 63105||November 3, 1981|
|109.||iClearing, LLC||100 Wood Avenue South Iselin, NJ 08830||February 7, 2001|
|110.||Integrated Fund Services, Inc.||221 East Fourth Street Suite 300 Cincinnati, OH 45202||May 15, 2003|
|111.||Investment Advisers, Inc.||1100 Dain Tower Minneapolis, MN 55440||October 9, 1981|
|112.||Isler, Colling & McAdams||Portland, OR||October 5, 1978|
|113.||J.C. Bradford & Co.||330 Commerce Street Nashville, TN 37201||February 28, 1982|
|114.||J.J.B. Hilliard, W.L. Lyons, Inc.||Hilliard Lyons Center 501 South Fourth St. Louisville, KY 40202||February 11, 1992|
|115.||Jacob Engle Foundation, Inc. (The)||PO Box 1136 Upland, CA 91786||March 25, 1983|
|116.||Janney Montgomery Scott, Inc.||1801 Market Street Philadelphia, PA 19103||March 23, 1982|
|117.||Jefferson Pilot Investor Services, Inc.||100 North Greene Street Greensboro, NC 27401||October 22, 1979|
|118.||Jesup, Josephthal & Co., Inc.||One Whitehall Street New York, NY 10004||December 18, 1990|
|119.||John Hancock Clearing Corporation||200 Liberty Street New York, NY 10281||March 21, 1991|
|120.||John Hancock Mutual Life Insurance Company||John Hancock Place 200 Clarendon Boston, MA 02117||August 24, 1993|
|121.||Juran & Moody, Inc.||Minnesota Mutual Life Center 400 North Robert Street Suite 800 Saint Paul, MN 55101||May 27, 1994|
|122.||Kagin Numismatic Services, Ltd.||1000 Insurance Exchange Bldg. Des Moines, IA 50309||March 18, 1980|
|123.||KH Funding Company||10801 Lockwood Drive Suite 370 Silver Spring, MD 20901||February 13, 2002|
|124.||Kirkpatrick, Pettis, Smith, Polian, Inc.||1623 Farnam Street Suite 700 Omaha, NE 68102||August 18, 1981|
|125.||L.F. Rothchild, Unterberg, Towbin||55 Water Street New York, NY 10041||December 23, 1985|
|126.||Legg Mason Wood Walker, Inc.||111 S. Calvert Street P.O. Box 1476 Baltimore, MD 21203||June 4, 1985|
|127.||Lehman Brothers, Inc.||200 Vesey Street New York, NY 10285||December 20, 2000|
|128.||Lester Sumrall Evangelistic Association, Inc.||530 East Ireland Road South Bend, IN 46614||September 2, 1988|
|129.||Liberty Life Insurance Co.||P.O. Box 789 Greenville, SC 29602||September 3, 1982|
|130.||Manley, Bennett, McDonald & Co.||St. Louis, MO||January 1, 1977|
|131.||McDonald & Company Securities, Inc.||580 Walnut Street Cincinnati, OH 45202||December 15, 1983|
|132.||MEGA Life and Health Insurance Company (The)||501 West Interstate 44 Service Road Oklahoma City, OK 73118||May 29, 1991|
|133.||Menold, Crawford, Hippler & Co.||23930 Michigan Ave. Dearborn, MI 40126||December 9, 1988|
|134.||Merrill, Lynch, Pierce, Fenner & Smith, Inc.||1700 Merrill Lynch Drive MSC 0703 Pennington, NJ 08534||August 3, 1987|
|135.||Merrimack Valley Investment, Inc.||367 Kingsbury Ave. Haverhill, MA 01830||September 28, 1984|
|136.||Mesirow Financial, Inc.||350 N. Clark Street Chicago, IL 60610||May 28, 1982|
|137.||Metropolitan Life Insurance Co.||One Madison Avenue New York, NY 10010||January 28, 1987|
|138.||Metropolitan Mortgage & Securities Corporation||W. 292 Sprague Ave. Spokane, WA 99204||November 10, 1976|
|139.||Mid-Ohio Securities Corp.||225 Burns Road Elyria, OH 44036||January 28, 1983|
|140.||Mid-States Enterprises, Inc.||Carroll, IA||December 30, 1976|
|141.||Miller Johnson & Kuehn, Inc.||5500 Wayzata Blvd. Minneapolis, MN 55416||November 15, 2000|
|142.||Milwaukee Company (The)||250 East Wisconsin Avenue Milwaukee, WI 53202||September 15, 1986|
|143.||MKI Securities Corp.||61 Broadway New York, NY 10006||April 17, 1985|
|144.||Money Management Associates||4922 Fairmont Avenue Bethesda, MD 20814||May 26, 1987|
|145.||Moody Bible Institute of Chicago||820 N. La Salle Boulevard Chicago, IL 60610-3284||April 25, 2003|
|146.||Moore & Schley, Cameron & Co.||Two Broadway New York, NY 10004||November 15, 1977|
|147.||Morgan Keegan & Company, Inc.||Morgan Keegan Tower Fifty Front Street Memphis, TN 38108||January 27, 1982|
|148.||Morgan Stanley DW, Inc.||1585 Broadway New York, NY 10036||May 29, 1986|
|149.||Mortgage Loan Services, Inc.||780 Lynnhaven Parkway Suite 200 Virginia Beach, VA 23452||March 15, 1995|
|150.||Moseley, Hallgarten, Estabrook & Weeden, Inc.||One New York Plaza New York, NY||December 10, 1985|
|151.||Murphy Favre, Inc.||W. 601 Riverside, 9th Floor Spokane, WA 99201||August 2, 1976|
|152.||Mutual Service Cooperative||Two Pine Tree Drive Arden Hills, MN 55112||June 6, 1996|
|153.||Myriad Corporation||1400 50th Street West Des Moines, IA 50265||July 20, 1977|
|154.||National Bank of Greece, S.A.||33 State Street Boston, MA 02109||February 4, 1988|
|155.||National Covenant Properties||5701 N. Francisco Dr. Chicago, IL 60625||June 30, 1978|
|156.||National Investor Services Corp.||44 Wall Street New York, NY 10005||March 18, 1996|
|157.||National Life Insurance Company||One National Life Drive Montpelier, VT 05604||January 1, 1998|
|158.||National Securities Corporation||1001 Fourth Avenue Suite 2200 Seattle, WA 98154||December 31, 1986|
|159.||Nationwide Advisory Services, Inc. (Nationwide Financial Services, Inc.)||One Nationwide Plaza Columbus, OH 43216||September 25, 1985|
|160.||Nationwide Credit Union||One Nationwide Plaza Columbus, OH 43216||April 13, 1978|
|161.||NBC Securities, Inc.||1927 First Avenue North Birmingham, AL 35203||July 16, 1996|
|162.||Neuberger & Berman||522 Fifth Ave. New York, NY 10036||October 4, 1983|
|163.||Newhard, Cook & Co.||300 North Broadway St. Louis, MO 63102||June 4, 1985|
|164.||Oberweis Securities, Inc.||841 North Lake Street Aurora, IL 60506||February 11, 1985|
|165.||Parker/Hunter, Inc.||600 Grant Street Pittsburgh, PA 15219||June 15, 1990|
|166.||Partnership Services, Inc.||5520 LBJ Freeway Suite 430 Dallas, TX 75240||March 31, 1993|
|167.||Peninsular Securities Co.||Waters Building Grand Rapids, MI 49503||January 28, 1985|
|168.||Perelman-Carley & Associates, Inc.||Twin Towers 3000 Farnam St. Omaha, NE 68131||January 13, 1989|
|169.||Pflueger & Baerwald, Inc.||Mills Building, Room 1000 220 Montgomery Street San Francisco, CA 94104||November 9, 1981|
|170.||PFS Investments, Inc.||3120 Breckenridge Boulevard Duluth, GA 30199||September 28, 1995|
|171.||Pioneer Financial Services, Inc.||4233 Roanoke Road Kansas City, MO 64111||January 25, 1985|
|172.||Pioneer Investment Management USA||60 State Street Boston, MA 02109||February 21, 1986|
|173.||Prescott, Ball & Turben, Inc.||1331 Euclid Ave. Cleveland, OH 44115||January 27, 1983|
|174.||PrimeVest Financial Services, Inc.||400 First Street South St. Cloud, MN 56301-3600||December 8, 1993|
|175.||Principal Life Insurance Company||711 High Street Des Moines, IA 50392-0001||July 27, 1988|
|176.||Prudential Securities, Inc.||100 Gold Street New York, NY 10292||July 28, 1989|
|177.||R. Rowland & Co., Inc.||St. Louis, MO||March 29, 1984|
|178.||R.G. Dickinson & Co.||200 Des Moines Building 405 6th Ave. Des Moines, IA 50309||July 20, 1983|
|179.||R.J. Steichen & Company||Midwest Plaza, Suite 100 801 Nicolett Mall Minneapolis, MN 55402-2526||May 21, 1993|
|180.||Raymond James & Associates, Inc.||880 Carrillon Parkway P.O. Box 12749 St. Petersburg, FL 33733-2749||April 26, 1982|
|181.||Raymond James & Associates, Inc.||880 Carillon Parkway P.O. Box 12749 St. Petersburg, FL 33733-2749||March 8, 1982|
|182.||RBC Dain Rauscher Inc.||Dain Rauscher Plazza 60 South Sixth Street Minneapolis, MN 55402-4422||March 2, 1998|
|183.||RBC Dain Rauscher, Inc.||Dain Rauscher Plazza 60 South Sixth Street Minneapolis, MN 55402-4422||January 22, 1982|
|184.||Regan MacKenzie, Incorporated||999 Third Avenue Suite 4300 Seattle, WA 98104||August 31, 1989|
|185.||Regions Investment Company, Inc.||2011 Fourth Avenue North Birmingham, AL 35203||July 20, 2000|
|186.||Reserve Management Company, Inc.||810 Seventh Avenue New York, NY 10019||October 18, 1989|
|187.||Robert W. Baird & Co., Inc.||777 E. Wisconsin Avenue Milwaukee, WI 53202||July 31, 1986|
|188.||Robinson-Humphrey Co., Inc (The)||Two Peachtree Street, N.W. Atlanta, GA 30383||May 24, 1982|
|189.||Romano Bros. & Co.||820 Davis Street Evanston, IL 60201||September 28, 1984|
|190.||Rose & Company Investment Brokers, Inc.||141 West Jackson Blvd. Chicago, IL 60604||April 14, 1982|
|191.||Rotan Mosle, Inc.||1500 South Tower Pennzoil Place P.O. Box 3226 Houston, TX 77001||May 6, 1980|
|192.||Rushmore Investment Brokers, Inc.||4922 Fairmont Avenue Bethesda, MD 20814||September 24, 1986|
|193.||Sanford C. Bernstein & Co., Inc.||767 Fifth Avenue New York, NY 10153||November 13, 1986|
|194.||Santa Ana City Employees Credit Union||800 West Santa Ana Blvd. Santa Ana, CA 92701||March 25, 1982|
|195.||Saturna Capital Corporation||101 Prospect Street Bellingham, WA 98227-2838||March 28, 1991|
|196.||SBC Trust Services, Inc.||2401 Cedar Springs Road Dallas, TX 75201-1407||April 10, 2001|
|197.||SBCI Swiss Bank Corporation Investment Banking, Inc.||222 Broadway, 4th Floor New York, NY 10038||February 11, 1992|
|198.||SBM Financial Services, Inc.||8400 Normandale Lake Blvd. Suite 1150 Minneapolis, MN 55437||May 13, 1995|
|199.||Scott & Stringfellow, Inc. (FKN Craige, Inc.)||823 E. Main Street Richmond, VA 23219||May 5, 1999|
|200.||Scottsdale Securities, Inc.||12855 Flushing Meadow Drive St. Louis, MO 63131||October 9, 1996|
|201.||Securities Management Research, Inc.||Two Moody Plaza Galveston, TX 77550||June 22, 1978|
|202.||Security Management Company, LLC (FKA Security Management Co.)||700 SW Harrison Street Topeka, KS 66636-0001||August 14, 1996|
|203.||SG Cowen Securities Corporation||1221 Avenue of the Americas New York, NY 10020||June 30, 1998|
|204.||ShareBuilder Securities Corporation||1000 124th Avenue, NE Bellevue, WA 98005||April 15, 2003|
|205.||SMA Services, Inc.||35 Lakeshore Drive Birmingham, AL 35209||August 27, 1998|
|206.||Smith, Moore & Co.||400 Locust Street St. Louis, MO 63102||January 18, 1983|
|207.||Southwest Securities, Inc.||Renaissance Tower Suite 4300 1201 Elm Street Dallas, TX 75270||December 9, 1992|
|208.||Spear Rees & Co.||505 North Brand Boulevard Sixteenth Floor Glendale, CA 91203||January 13, 1988|
|209.||Spear, Leeds & Kellog||120 Broadway New York, NY 10271||March 29, 1996|
|210.||State Bond and Mortgage Company||8500 Normandale Lake Blvd. Minneapolis, MN 55437||December 21, 1990|
|211.||State Employees Credit Union||801 Hillsborough Street P.O. Box 26807 Raleigh, NC 27611-6807||January 1, 1977|
|212.||State Farm Investment Management Corporation||One State Farm Plaza Bloomington, IL 61410||September 22, 1999|
|213.||Stephens, Inc.||111 Center Street Little Rock, AR 72201||December 4, 1987|
|214.||Stern Brothers & Co.||1100 Main Street Suite 2200 Kansas City, MO 64199||December 15, 1987|
|215.||Sterne, Agee & Leach, Inc.||1500 Am South-Sonat Tower Birmingham, AL 35203||September 11, 1981|
|216.||Stifel, Nicolaus & Co., Inc.||500 North Broadway St. Louis, MO 63102||September 9, 1981|
|217.||Summit Discount Brokerage (FKA Lehigh Securities Corp.)||1457 MacArthur Road Lehigh Valley, PA 18002||April 4, 1990|
|218.||Sunpoint Securities, Inc.||911 W. Loop 281 Longview, TX 75604||April 1, 1998|
|219.||SunTrust Capital Markets, Inc.||3333 Peachtree Road, NE Atlanta, GA 30326||May 27, 1982|
|220.||Sutro & Company, Inc.||201 California Street San Francisco, CA 94111-5096||December 8, 1988|
|221.||Swiss American Securities, Inc.||100 Wall Street New York, NY 10005||December 2, 1980|
|222.||Texas First Securities Corporation||1360 Post Oak Blvd. Suite 120 Houston, TX 77056||November 17, 1988|
|223.||TIAA-CREF Individual & Institutional Services, Inc.||730 Third Avenue New York, NY 10017||September 9, 2002|
|224.||Tucker Anthony, Incorporated||One Beacon Street Boston, MA 02108||October 23, 1980|
|225.||U.S. Bancorp Piper Jaffray, Inc.||800 Micollet Mall Suite 800 Minneapolis, MN 55402-7020||April 21, 1982|
|226.||U.S. Clearing Corporation||120 Wall Street New York, NY 10005||May 3, 1983|
|227.||UBS Financial Services, Inc. (FKA UBS Paine Webber, Inc.)||1285 Avenue of the Americas New York, NY 10019||May 12, 1989|
|228.||Unified Financial Securities, Inc.||429 North Pennsylvania Street Indianapolis, IN 46204||October 28, 1976|
|229.||United of Omaha Life Insurance Co.||Mutual of Omaha Plaza Omaha, NE 68175||March 16, 1982|
|230.||USAA Transfer Agency Company of Delaware||USAA Building San Antonio, TX 78288||October 2, 1990|
|231.||W.H. Reaves & Co., Inc.||30 Montgomery Street Jersey City, NJ 07302||December 7, 1990|
|232.||W.H. Turlington & Co.||509 East Center Street Lexington, NC 27292||November 3, 1980|
|233.||Wachovia Securities, Inc.||201 North Tryon Street Charlotte, NC 28202||April 6, 1990|
|234.||Wachovia Securities, LLC||901 East Byrd Street Richmond, VA 23219||July 1, 2003|
|235.||Wayne Hummer & Co.||300 South Wacker Drive Chicago, IL 60606||January 25, 1983|
|236.||Web Street Securities, Inc.||222 South Riverside Plaza 11th Floor Chicago, IL 60601||April 27, 2000|
|237.||Wedbush Morgan Securities||1000 Wilshire Boulevard Los Angeles, CA 90030||December 24, 1984|
|238.||Weiss, Peck & Greer||One New York Plaza New York, NY 10004||June 16, 1982|
|239.||Wells Advisors, Inc.||3885 Holcomb Bridge Road Norcross, GA 30092||March 20, 1992|
|240.||Wexford LLC Corporation||1 New York Plaza 11th Floor New York, NY 10292||June 30, 1998|
|241.||Wheat, First Securities, Inc.||707 East Main Street P.O. Box 1357 Richmond, VA 23211||March 23, 1983|
|242.||William R. Hough & Co., Inc.||100 2nd Avenue South Suite 800 St. Petersburg, FL 33701||April 18, 1995|
Announcement 2004-70 is amended to extend, through October 5, 2004, the relief from the penalty under section 6715 of the Internal Revenue Code for the highway use of dyed diesel fuel in the State of Florida.
The principal author of this announcement is Barbara B. Franklin of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding this announcement, contact Barbara B. Franklin at (202) 622-3291 (not a toll-free call).
Publication 1187, Specification for Filing Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, Electronically or Magnetically, is being revised for Tax Year 2004. The Publication will not be available prior to the start of the testing season, November 1, 2004, through December 15, 2004. Since the Publication is unavailable, the Nature of Changes Section is printed here to assist those who wish to submit test files. For additional information, contact the Information Reporting Program Customer Service Section toll-free at 866-455-7438.
.01 Part B, Electronic Filing Specifications, was completely revised. Please read carefully. We now offer an internet connection at http://fire.irs.gov.
.02 The following changes were made to the Transmitter ‘T’ Record:
(a) In position 199 a new field, Prior Year Data Indicator, was added.
(b) In positions 771-778 a new field, Record Sequence Number, was added.
.03 The following changes were made to Withholding Agent ‘W’ Record:
(a) In position 13, Withholding Agent’s EIN Indicator, the indicators were renumbered and a new indicator for NQI-EIN was added. Acceptable values are: 0, (zero) = EIN, 1, (one) = QI-EIN and 2 (two) = NQI-EIN
(b) In positions 771-778 a new field, Record Sequence Number, was added.
.04 The following change was made to the Recipient ‘Q’ Record:
(a) In positions 771-778 a new field, Record Sequence Number, was added.
.05 The following change was made to Reconciliation ‘C’ Record:
(a) In positions 771-778 a new field, Record Sequence Number, was added.
.06 The following change was made to the End of Transmission ‘F’ Record:
(a) In positions 771-778 a new field, Record Sequence Number, was added.
.07 Additional editorial changes of a clarifying nature have been made throughout Publication 1187. Please read the entire publication carefully.
.08 The dates for sending test data are November 1, 2004, through December 15, 2004.
This announcement provides additional instructions for Line 8c on the 2003 Schedule B (Form 5500). In order to provide government agencies and plan participants with contribution information on defined benefit plans, plan sponsors must annually file the Schedule B as an attachment to the Form 5500 Series (Annual Return/Report of Employee Benefit Plans). Because many plan sponsors have had difficulty reporting the data required by line 8c of the 2003 Schedule B, this announcement is intended to provide flexible options to comply with existing reporting requirements. This announcement merely replaces certain instructions in order to clarify and simplify the method for reporting data. Because this announcement is not a request for new data, and does not contain a new reporting requirement, if plans have already filed under published instructions prior to the issuance of this announcement, do not file again.
The 2003 instructions for Line 8c regarding cash balance plans require that “such plans reporting 1,000 or more active participants on line 2b(3) must also provide average cash balance account data.” The 2003 instructions did not provide a specific method for reporting the required data.
The following replaces paragraph 5 of line 8c of the 2003 Schedule B instructions:
“Cash balance plans (or any plans using plan characteristic code 1C on line 8a of Form 5500), reporting 1,000 or more active participants on line 2b(3) must also provide average cash balance account data, regardless of whether all active participants have cash balance accounts. For each age/service bin, enter the average cash balance account of the active participants in that bin. Do not enter the average cash balance account in any age/service bin that contains fewer than 20 active participants.
General Rule. In general, data to be shown in each age/service bin includes: (1) the number of active participants in the age/service bin, (2) the average compensation of the active participants in the age/service bin, and (3) the average cash balance account of the active participant in the age/service bin, using $0 for anyone who has no cash balance account-based benefit. If the accrued benefit is the greater of a cash balance benefit or some other benefit, average in only the cash balance account. If the accrued benefit is the sum of a cash balance account benefit and some other benefit, average in only the cash balance account. For both the average compensation and the average cash balance account, do not enter an amount for age/service bins with fewer than 20 participants.
In lieu of the above, two alternatives are provided for showing compensation and cash balance accounts. Each alternative provides for two age/service scatters (one showing compensation and one showing cash balance accounts) as follows:
Scatter 1—Provide participant count and average compensation for all active participants, whether or not participants have account-based benefits.
Scatter 2—Provide participant count and average cash balance account for all active participants, whether or not participants have account-based benefits.
Scatter 1—Provide participant count and average compensation for all active participants, whether or not participants have account-based benefits (i.e., identical to Scatter 1 in Alternative A).
Scatter 2—Provide participant count and average cash balance account for only those active participants with account-based benefits. If the number of participants with account-based benefits in a bin is fewer than 20, the average account should not be shown even if there are more than 20 participants in this bin on Scatter 1.
In general, information should be determined as of the valuation date. Average cash balance accounts may be determined as of either: (1) the valuation date or (2) the day immediately preceding the valuation date. If the cash balance account information as of the 2003 valuation date is not readily available, information as of another date within 12 months of the valuation date (before or after this date) may be used. This date must be clearly indicated on the attachment, along with an explanation, if the date is also used for another purpose, such as determining a participant’s age and service.
Average cash balance accounts that are offset by amounts from another plan may be reported either as amounts prior to taking into account the offset, or as amounts after taking into account the offset. Do not report the offset amount. For any other unusual or unique situation, the attachment should include an explanation of what is being provided.”
Amplified describes a situation where no change is being made in a prior published position, but the prior position 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 principle 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 confusion. 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 amplified and clarified, above).
Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. This term is most commonly used in a ruling that lists previously published rulings that are obsoleted because of changes in laws or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted.
Revoked describes situations where the position in the previously published ruling is not correct and the correct position is being stated in a 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 published under the 1939 Code and regulations. 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 the new ruling does more than restate the substance of a prior ruling, a combination of terms is used. For example, modified and superseded describes 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.
Revenue rulings and revenue procedures (hereinafter referred to as “rulings”) that have an effect on previous rulings use the following defined terms to describe the effect:
The following abbreviations in current use and formerly used will appear in material published in the Bulletin.
B.T.A.—Board of Tax Appeals.
CFR—Code of Federal Regulations.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
ERISA—Employee Retirement Income Security Act.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
FUTA—Federal Unemployment Tax Act.
G.C.M.—Chief Counsel’s Memorandum.
I.R.B.—Internal Revenue Bulletin.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T.D. —Treasury Decision.
T.I.R.—Technical Information Release.
U.S.C.—United States Code.
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2004-1 through 2004-26 is in Internal Revenue Bulletin 2004-26, dated June 28, 2004.
Bulletins 2004-27 through 2004-41
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2004-1 through 2004-26 is in Internal Revenue Bulletin 2004-26, dated June 28, 2004.
Bulletins 2004-27 through 2004-41
|Old Article||Action||New Article||Issue||Link||Page|
|88-128||Supplemented by||Notice 2004-61||2004-41 I.R.B.||2004-41|
|98-65||Superseded by||Rev. Proc. 2004-40||2004-29 I.R.B.||2004-29||50|
|2001-50||Modified by||Rev. Proc. 2004-46||2004-31 I.R.B.||2004-31||142|
|2002-70||Modified by||Notice 2004-65||2004-41 I.R.B.||2004-41|
|2003-76||Supplemented and superseded by||Notice 2004-67||2004-41 I.R.B.||2004-41|
|2003-76||Modified by||Notice 2004-65||2004-41 I.R.B.||2004-41|
|2004-2||Modified by||Notice 2004-50||2004-33 I.R.B.||2004-33||196|
|2004-2||Corrected by||Ann. 2004-67||2004-36 I.R.B.||2004-36||459|
|Old Article||Action||New Article||Issue||Link||Page|
|INTL-116-90||Withdrawn by||REG-208246-90||2004-36 I.R.B.||2004-36||450|
|REG-208254-90||Withdrawn by||REG-136481-04||2004-37 I.R.B.||2004-37||480|
|REG-104683-00||Partially withdrawn by||Ann. 2004-64||2004-35 I.R.B.||2004-35||402|
|REG-165579-02||Withdrawn by||Ann. 2004-69||2004-39 I.R.B.||2004-39||542|
|REG-150562-03||Corrected by||Ann. 2004-68||2004-38 I.R.B.||2004-38||508|
|REG-150562-03||Corrected by||Ann. 2004-73||2004-39 I.R.B.||2004-39||543|
|Old Article||Action||New Article||Issue||Link||Page|
|79-61||Superseded by||Rev. Proc. 2004-44||2004-31 I.R.B.||2004-31||134|
|89-37||Obsoleted by||Rev. Rul. 2004-90||2004-34 I.R.B.||2004-34||317|
|94-64||Superseded by||Rev. Proc. 2004-38||2004-27 I.R.B.||2004-27||10|
|96-18||Obsoleted by||Rev. Rul. 2004-90||2004-34 I.R.B.||2004-34||317|
|96-53||Superseded by||Rev. Proc. 2004-40||2004-29 I.R.B.||2004-29||50|
|96-60||Superseded by||Rev. Proc. 2004-53||2004-34 I.R.B.||2004-34||320|
|98-41||Superseded by||Rev. Proc. 2004-56||2004-35 I.R.B.||2004-35||376|
|2000-37||Modified by||Rev. Proc. 2004-51||2004-33 I.R.B.||2004-33||294|
|2002-9||Modified and amplified by||Rev. Proc. 2004-41||2004-30 I.R.B.||2004-30||90|
|2003-28||Superseded by||Rev. Proc. 2004-58||2004-41 I.R.B.||2004-41|
|2003-30||Superseded by||Rev. Proc. 2004-54||2004-34 I.R.B.||2004-34||325|
|2003-52||Superseded by||Rev. Proc. 2004-50||2004-33 I.R.B.||2004-33||211|
|2004-4||Modified by||Rev. Proc. 2004-44||2004-31 I.R.B.||2004-31||134|
|2004-23||Modified by||Rev. Proc. 2004-57||2004-38 I.R.B.||2004-38||498|
|Old Article||Action||New Article||Issue||Link||Page|
|54-379||Superseded by||Rev. Rul. 2004-68||2004-31 I.R.B.||2004-31||118|
|58-120||Obsoleted by||Rev. Rul. 2004-90||2004-34 I.R.B.||2004-34||317|
|62-60||Amplified by||Rev. Proc. 2004-53||2004-34 I.R.B.||2004-34||320|
|70-58||Obsoleted by||Rev. Rul. 2004-90||2004-34 I.R.B.||2004-34||317|
|73-354||Obsoleted by||Rev. Rul. 2004-76||2004-31 I.R.B.||2004-31||111|
|78-371||Distinguished by||Rev. Rul. 2004-86||2004-33 I.R.B.||2004-33||191|
|79-64||Obsoleted by||Rev. Rul. 2004-90||2004-34 I.R.B.||2004-34||317|
|80-7||Amplified and clarified by||Rev. Rul. 2004-71||2004-30 I.R.B.||2004-30||74|
|80-7||Amplified and clarified by||Rev. Rul. 2004-72||2004-30 I.R.B.||2004-30||77|
|80-7||Amplified and clarified by||Rev. Rul. 2004-73||2004-30 I.R.B.||2004-30||80|
|80-7||Amplified and clarified by||Rev. Rul. 2004-74||2004-30 I.R.B.||2004-30||84|
|80-366||Obsoleted by||Rev. Rul. 2004-90||2004-34 I.R.B.||2004-34||317|
|81-100||Clarified and modified by||Rev. Rul. 2004-67||2004-28 I.R.B.||2004-28||28|
|85-70||Amplified and clarified by||Rev. Rul. 2004-71||2004-30 I.R.B.||2004-30||74|
|85-70||Amplified and clarified by||Rev. Rul. 2004-72||2004-30 I.R.B.||2004-30||77|
|85-70||Amplified and clarified by||Rev. Rul. 2004-73||2004-30 I.R.B.||2004-30||80|
|85-70||Amplified and clarified by||Rev. Rul. 2004-74||2004-30 I.R.B.||2004-30||84|
|92-105||Distinguished by||Rev. Rul. 2004-86||2004-33 I.R.B.||2004-33||191|
|2004-75||Amplified by||Rev. Rul. 2004-97||2004-39 I.R.B.||2004-39||516|
|Old Article||Action||New Article||Issue||Link||Page|
|9031||Removed by||T.D. 9152||2004-39 I.R.B.||2004-39||509|
The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletin is sold on a yearly subscription basis by the Superintendent of Documents. Current subscribers are notified by the Superintendent of Documents when their subscriptions must be renewed.
The contents of this weekly Bulletin are consolidated semiannually into a permanent, indexed, Cumulative Bulletin. These are sold on a single copy basis and are not included as part of the subscription to the Internal Revenue Bulletin. Subscribers to the weekly Bulletin are notified when copies of the Cumulative Bulletin are available. Certain issues of Cumulative Bulletins are out of print and are not available. Persons desiring available Cumulative Bulletins, which are listed on the reverse, may purchase them from the Superintendent of Documents.
You may view the Internal Revenue Bulletin on the Internet at www.irs.gov. Under information for: select Businesses. Under related topics, select More Topics. Then select Internal Revenue Bulletins.
Internal Revenue Bulletins are available annually as part of Publication 1976 (Tax Products CD-ROM). The CD-ROM can be purchased from National Technical Information Service (NTIS) on the Internet at www.irs.gov/cdorders (discount for online orders) or by calling 1-877-233-6767. The first release is available in mid-December and the final release is available in late January.
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If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we would be pleased to hear from you. You can e-mail us your suggestions or comments through the IRS Internet Home Page (www.irs.gov) or write to theIRS Bulletin Unit, SE:W:CAR:MP:T:T:SP, Washington, DC 20224