us-irs-revenue-procedures-irb-2004-44-pdf•Internal Revenue Bulletin 2004-44 (PDF rendition): IRS Revenue Procedures
Internal Revenue Bulletin 2004-44 (PDF rendition): IRS Revenue Procedures
us-irs-revenue-procedures-irb-2004-44-pdfInternal Revenue Bulletin 2004-44 (PDF rendition): IRS Revenue ProceduresGuidance
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Bulletin No. 200 4-44 November 1, 2004 HIGHLIGHTS OF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations. INCOME TAX Rev. Rul. 2004–99, page 720. 2004 base period T-bill rate.The “base period T-bill rate” for the period ending September 30, 2004, is published as required by section 995(f) of the Code. Rev. Rul. 2 004–100, page 718. Low-incom e housing credit; satisfactory bond; “bond factor” am ounts for the period January through Decem- ber 2004.T his ruling announces the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-inco me buildings or interests therein during the period January t hrough December 2004. Rev. Rul. 2004–101, page 719. LIFO; price indexes; department stores.The August 2004 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, August 31, 2004. Notice 2004–70, page 724. This document provides guidance regarding the treatment as qualified dividend income, for purposes of section 1(h)(11) of the Code, of distributions, inclusions, and other amounts from foreign corporations subject to certain anti-deferral regimes. EXEMPT ORGANIZATIONS Announcement 2004–88, page 779. A list is provided of organizations now classified as private foun- dations. ADMINISTRATIVE Rev. Proc. 2004–62, page 728. Substitute tax forms and schedules.Requirements are set forth for privately designed and printed federal tax forms and conditions under which the Service will accept computer- prepared, and computer-generated tax forms and schedules. Rev. Proc. 2003–73 superseded. Fi nding Lists begin on page ii. The IRS Mission Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. Introduction The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conven- tions, 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 sub- stantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, mod- ify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indi- cated. Procedures relating solely to matters of internal man- agement 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.—19 86 Code. This part i ncludes rulings and decisions based on provisions of the Intern al 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, Leg- islation 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 Rul- ings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Sec- retary (Enforcement). Part IV .—Items of General Interest. This par t includes notices of proposed rulemakings, disbar- ment an d 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. The c ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate. For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402. November 1, 20042004–44 I.R.B. Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 Section 42.—Low-Income Housing Credit Low-income housing credit; satisfac- tory bond; “bond factor” amounts for the period January through December 2004.This ruling announces the monthly bond factor amounts to be used by taxpay- ers who dispose of qualified low-income buildings or interests therein during the pe- riod January through December 2004. Rev. Rul. 2004–100 In Rev. Rul. 90–60, 1990–2 C.B. 3, the Internal Revenue Service provided guidance to taxpayers concerning the gen- eral methodology used by the Treasury Department in computing the bond factor amounts used in calculating the amount of bond considered satisfactory by the Secretary under § 42(j)(6)oftheInternal Revenue Code. It further announced that the Secretary would publish in the Internal Revenue Bulletin a table of bond factor amounts for dispositions occurring during each calendar month. Rev. Proc. 99–11, 1999–1 C.B. 275, established a collateral program as an al- ternative to providing a surety bond for taxpayers to avoid or defer recapture of the low-income housing tax credits under § 42(j)(6). Under this program, taxpayers may establish a Treasury Direct Account and pledge certain United States Treasury securities to the Internal Revenue Service as security. This revenue ruling provides in Table 1 the bond factor amounts for calculat- ing the amount of bond considered satis- factory under § 42(j)(6) or the amount of United States Treasury securities to pledge in a Treasury Direct Account under Rev. Proc. 99–11 for dispositions of qualified low-income buildings or interests therein during the period January through Decem- ber 2004. Table 1 Rev. Rul. 2004–100 Monthly Bond Factor Amounts for Dispositions Expressed As a Percentage of Total Credits Calendar Year Building Placed in Service or, if Section 42(f)(1) Election Was Made, the Succeeding Calendar Year Month of Disposition 19901991199219931994199519961997199819992000 Jan ’0414.7127.3138.1547.4055.2754.5254.0053.5753.2753.0152.84 Feb ’0414.7127.3138.1547.4055.2754.4053.8953.4553.1652.9152.74 Mar ’0414.7127.3138.1547.4055.2754.2853.7753.3453.0552.8152.65 Apr ’0415.5528.8840.3450.1258.4557.8457.8757.9958.2558.5658.98 May ’0415.5528.8840.3450.1258.4557.7157.7557.8758.1358.4558.87 Jun ’0415.5528.8840.3450.1258.4557.5957.6357.7558.0258.3458.77 Jul ’0414.7527.3838.2447.5255.4153.9653.4653.0552.7852.5652.43 Aug ’0414.7527.3838.2447.5255.4153.8553.3652.9552.6852.4752.35 Sep ’0414.7527.3838.2447.5255.4153.7553.2652.8652.5952.3852.27 Oct ’0415.5228.8140.2450.0058.3056.9957.0457.1857.4657.8258.28 Nov ’0415.5228.8140.2450.0058.3056.8856.9357.0857.3757.7258.19 Dec ’0415.5228.8140.2450.0058.3056.7756.8356.9757.2757.6458.11 2004–44 I.R.B.718November 1, 2004 Table 1 (cont’d) Rev. Rul. 2004–100 Monthly Bond Factor Amounts for Dispositions Expressed As a Percentage of Total Credits Calendar Year Building Placed in Service or, if Section 42(f)(1) Election Was Made, the Succeeding Calendar Year Month of Disposition 2001200220032004 Jan ’0452.9953.4054.0254.15 Feb ’0452.9053.3053.9254.15 Mar ’0452.8153.2253.8354.15 Apr ’0459.7460.7962.0462.68 May ’0459.6460.6961.9362.68 Jun ’0459.5560.5961.8462.68 Jul ’0452.6153.0353.6454.15 Aug ’0452.5452.9753.5954.15 Sep ’0452.4752.9153.5454.15 Oct ’0459.0860.1661.4662.68 Nov ’0459.0160.1061.4062.68 Dec ’0458.9460.0461.3662.68 For a list of bond factor amounts ap- plicable to dispositions occurring during other calendar years, see: Rev. Rul. 98–3, 1998–1 C.B. 248; Rev. Rul. 2001–2, 2001–1 C.B. 255; Rev. Rul. 2001–53, 2001–2 C.B. 488; Rev. Rul. 2002–72, 2002–2 C.B. 759; and Rev. Rul. 2003–117, 2003–46 I.R.B. 1051. DRAFTING INFORMATION The principal author of this revenue ruling is David McDonnell of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further in- formation regarding this revenue ruling, contact Mr. McDonnell at (202) 622–3040 (not a toll-free call). Section 472.—Last-in, First-out Inventories 26 CFR 1.472–1: Last-in, first-out inventories. LIFO; price indexes; department stores.The August 2004 Bureau of La- bor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, August 31, 2004. Rev. Rul. 2004–101 The following Department Store Inven- tory Price Indexes for August 2004 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Inter- nal Revenue Service, under § 1.472–1(k) of the Income Tax Regulations and Rev. Proc. 86–46, 1986–2 C.B. 739, for ap- propriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, August 31, 2004. The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of depart- ments, (b) three special combinations of the major groups — soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, ex- cept for the following: candy, food, liquor, tobacco, and contract departments. November 1, 20047192004–44 I.R.B. BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS (January 1941 = 100, unless otherwise noted) GroupsAug. 2003Aug. 2004 Percent Change from Aug. 2003 to Aug. 2004 1 1. PieceGoods .............................................488.9513.25.0 2. DomesticsandDraperies..................................568.7525.7-7.6 3. Women’sandChildren’sShoes ............................631.4623.7-1.2 4. Men’sShoes.............................................838.8838.60.0 5. Infants’Wear ............................................589.1561.1-4.8 6. Women’sUnderwear......................................510.7502.4-1.6 7. Women’sHosiery ........................................347.8337.5-3.0 8. Women’sandGirls’Accessories ...........................551.0557.21.1 9. Women’sOuterwearandGirls’Wear .......................350.2341.4-2.5 10. Men’sClothing ..........................................528.7524.4-0.8 11. Men’sFurnishings........................................565.6564.3-0.2 12. Boys’ClothingandFurnishings............................423.3414.5-2.1 13. Jewelry..................................................880.6902.52.5 14. Notions .................................................787.1794.81.0 15. ToiletArticlesandDrugs..................................979.8992.71.3 16. FurnitureandBedding ....................................619.8607.8-1.9 17. FloorCoverings..........................................588.7581.5-1.2 18. Housewares..............................................720.4709.6-1.5 19. MajorAppliances.........................................209.7196.9-6.1 20. RadioandTelevision......................................45.041.2-8.4 21. Recreation and Education 2 .................................82.380.1-2.7 22. Home Improvements 2 .....................................124.2129.24.0 23. Automotive Accessories 2 ..................................111.7112.81.0 Groups1–15:SoftGoods .......................................553.5546.4-1.3 Groups16–20:DurableGoods...................................392.1379.2-3.3 Groups 21–23: Misc. Goods 2 ....................................93.893.1-0.7 Store Total 3 ..............................................495.2487.1-1.6 1 Abs ence of a minus sign before the percentage change in this column signifies a price increase. 2 Indexes on a January 1986 = 100 base. 3 The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco and contract departments. DRAFTING INFORMATION The principal author of this revenue ruling is Michael Burkom of the Office of Associate Chief Counsel (Income Tax and Accounting). For further informa- tion regarding this revenue ruling, contact Mr. Burkom at (202) 622–7924 (not a toll-free call). Section 995.—Taxation of DISC Income to Shareholders 2004 base period T-bill rate.The “base period T-bill rate” for the period ending September 30, 2004, is published as required by section 995(f) of the Code. Rev. Rul. 2004–99 Section 995(f)(1) of the Internal Rev- enue Code provides that a shareholder of a DISC shall pay interest each taxable year in an amount equal to the product of the shareholder’s DISC-related deferred tax li- ability for the year and the “base period T-bill rate.” Under section 995(f)(4), the base period T-bill rate is the annual rate of interest determined by the Secretary to be equivalent to the average of the 1-year constant maturity Treasury yields, as pub- lished by the Board of Governors of the Federal Reserve System, for the 1-year pe- riod ending on September 30 of the calen- dar year ending with (or of the most recent calendar year ending before) the close of the taxable year of the shareholder. The base period T-bill rate for the period end- ing September 30, 2004 is 1.60 percent. 2004–44 I.R.B.720November 1, 2004 Pursuant to section 6222 of the Code, interest must be compounded daily. The table below provides factors for com- pounding the base period T-bill rate daily for any number of days in the share- holder’s taxable year (including a 52–53 week accounting period) for the 2004 base period T-bill rate. To compute the amount of the interest charge for the shareholder’s taxable year, multiply the amount of the shareholder’s DISC-related deferred tax liability (as defined in section 995(f)(2)) for that year by the base period T-bill rate factor corresponding to the number of days in the shareholder’s taxable year for which the interest charge is being com- puted. Generally, one would use the factor for 365 days. One would use a different factor only if the shareholder’s taxable year for which the interest charge being determined is a short taxable year, if the shareholder uses the 52–53 week taxable year, or if the shareholder’s taxable year is a leap year. For the base period T-bill rates for the periods ending in prior years, see Rev. Rul. 2003–111, 2003–45 I.R.B. 1009, Rev. Rul. 2002–68, 2002–2 C.B. 808, Rev. Rul. 2001–56, 2001–2 C.B. 500, and Rev. Rul. 2000–52, 2000–2 C.B. 516. DRAFTING INFORMATION The principal author of this revenue rul- ing is David Bergkuist of the Office of the Associate Chief Counsel (International). For further information about this revenue ruling, contact Mr. Bergkuist at (202) 622–3850 (not a toll-free call). 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 1.000043716 2.000087434 3.000131153 4.000174875 5.000218598 6.000262324 7.000306051 8.000349780 9.000393511 10.000437244 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 11.000480979 12.000524716 13.000568455 14.000612196 15.000655938 16.000699683 17.000743429 18.000787178 19.000830928 20.000874680 21.000918434 22.000962190 23.001005948 24.001049708 25.001093470 26.001137233 27.001180999 28.001224766 29.001268536 30.001312307 31.001356080 32.001399855 33.001443632 34.001487411 35.001531192 36.001574975 37.001618760 38.001662546 39.001706335 40.001750125 41.001793918 42.001837712 43.001881508 44.001925306 45.001969106 46.002012908 47.002056712 48.002100518 49.002144325 50.002188135 51.002231947 52.002275760 53.002319575 54.002363393 55.002407212 56.002451033 57.002494856 58.002538681 59.002582508 60.002626336 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 61.002670167 62.002714000 63.002757834 64.002801670 65.002845509 66.002889349 67.002933191 68.002977035 69.003020881 70.003064729 71.003108579 72.003152431 73.003196284 74.003240140 75.003283997 76.003327857 77.003371718 78.003415581 79.003459447 80.003503314 81.003547183 82.003591054 83.003634926 84.003678801 85.003722678 86.003766556 87.003810437 88.003854319 89.003898204 90.003942090 91.003985978 92.004029868 93.004073760 94.004117654 95.004161550 96.004205448 97.004249347 98.004293249 99.004337153 100.004381058 101.004424965 102.004468875 103.004512786 104.004556699 105.004600614 106.004644531 107.004688450 108.004732371 109.004776293 110.004820218 November 1, 20047212004–44 I.R.B. 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 111.004864145 112.004908073 113.004952004 114.004995936 115.005039870 116.005083806 117.005127744 118.005171684 119.005215626 120.005259570 121.005303516 122.005347464 123.005391413 124.005435365 125.005479318 126.005523274 127.005567231 128.005611190 129.005655151 130.005699114 131.005743079 132.005787046 133.005831015 134.005874986 135.005918959 136.005962933 137.006006910 138.006050888 139.006094869 140.006138851 141.006182835 142.006226821 143.006270809 144.006314799 145.006358791 146.006402785 147.006446781 148.006490778 149.006534778 150.006578779 151.006622783 152.006666788 153.006710796 154.006754805 155.006798816 156.006842829 157.006886844 158.006930861 159.006974880 160.007018900 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 161.007062923 162.007106948 163.007150974 164.007195003 165.007239033 166.007283065 167.007327100 168.007371136 169.007415174 170.007459214 171.007503256 172.007547300 173.007591345 174.007635393 175.007679443 176.007723494 177.007767548 178.007811603 179.007855661 180.007899720 181.007943781 182.007987844 183.008031909 184.008075976 185.008120045 186.008164116 187.008208189 188.008252263 189.008296340 190.008340418 191.008384499 192.008428581 193.008472666 194.008516752 195.008560840 196.008604930 197.008649022 198.008693116 199.008737212 200.008781310 201.008825409 202.008869511 203.008913615 204.008957720 205.009001828 206.009045937 207.009090048 208.009134162 209.009178277 210.009222394 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 211.009266513 212.009310634 213.009354757 214.009398881 215.009443008 216.009487137 217.009531267 218.009575400 219.009619534 220.009663671 221.009707809 222.009751949 223.009796091 224.009840236 225.009884382 226.009928529 227.009972679 228.010016831 229.010060985 230.010105141 231.010149298 232.010193458 233.010237619 234.010281783 235.010325948 236.010370115 237.010414284 238.010458455 239.010502629 240.010546803 241.010590980 242.010635159 243.010679340 244.010723523 245.010767707 246.010811894 247.010856082 248.010900273 249.010944465 250.010988660 251.011032856 252.011077054 253.011121254 254.011165456 255.011209660 256.011253866 257.011298074 258.011342283 259.011386495 260.011430709 2004–44 I.R.B.722November 1, 2004 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 261.011474924 262.011519142 263.011563361 264.011607583 265.011651806 266.011696031 267.011740258 268.011784487 269.011828718 270.011872951 271.011917186 272.011961423 273.012005662 274.012049902 275.012094145 276.012138390 277.012182636 278.012226884 279.012271135 280.012315387 281.012359641 282.012403897 283.012448156 284.012492416 285.012536678 286.012580941 287.012625207 288.012669475 289.012713745 290.012758016 291.012802290 292.012846565 293.012890843 294.012935122 295.012979404 296.013023687 297.013067972 298.013112259 299.013156548 300.013200839 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 301.013245132 302.013289427 303.013333724 304.013378023 305.013422323 306.013466626 307.013510930 308.013555237 309.013599545 310.013643856 311.013688168 312.013732482 313.013776798 314.013821117 315.013865437 316.013909759 317.013954082 318.013998408 319.014042736 320.014087066 321.014131398 322.014175731 323.014220067 324.014264404 325.014308744 326.014353085 327.014397428 328.014441774 329.014486121 330.014530470 331.014574821 332.014619174 333.014663529 334.014707886 335.014752245 336.014796605 337.014840968 338.014885333 339.014929699 340.014974068 2004 ANNUAL RATE, COMPOUNDED DAILY DAYS 1.60 PERCENT FACTOR 341.015018438 342.015062811 343.015107185 344.015151561 345.015195939 346.015240320 347.015284702 348.015329086 349.015373472 350.015417860 351.015462249 352.015506641 353.015551035 354.015595431 355.015639828 356.015684228 357.015728629 358.015773033 359.015817438 360.015861845 361.015906255 362.015950666 363.015995079 364.016039494 365.016083911 366.016128330 367.016172751 368.016217174 369.016261599 370.016306025 371.016350454 November 1, 20047232004–44 I.R.B. Part III. Administrative, Procedural, and Miscellaneous Treatment as Qualified Dividend Income for Purposes of Section 1(h)(11) of the InternalRevenueCodeof Distributions, Inclusions, and Other Amounts From Foreign Corporations Subject to Certain Anti-Deferral Regimes Notice 2004–70 SECTION 1. PURPOSE This notice provides guidance regard- ing the extent to which distributions, inclusions and other amounts received by, or included in the income of, individual shareholders as ordinary income from foreign corporations subject to certain anti-deferral regimes may be treated as qualified dividend income for purposes of section 1(h)(11) of the Internal Revenue Code (Code). This guidance is necessary to reflect the provisions of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108–27, 117 Stat. 752) (2003 Act) that provided for reduced rates of tax on certain dividends for taxable years beginning after December 31, 2002. The Treasury Department and the Internal Rev- enue Service intend to issue regulations under section 1(h)(11) of the Code that incorporate the guidance set forth in this notice. SECTION 2. OVERVIEW The 2003 Act provides that qualified dividend income received by an individual shareholder is subject to tax at reduced rates. This notice provides guidance re- garding the extent to which distributions, inclusions, and other amounts received by, or included in the income of, individ- ual shareholders as ordinary income from foreign corporations subject to certain anti-deferral regimes may be treated as qualified dividend income for purposes of section 1(h)(11) of the Code. Section 3 of this notice describes the statutory rules for determining whether income is qualified dividend income and describes in general the anti-deferral regimes appli- cable to controlled foreign corporations (as defined in sections 957(a) and (b) and 953(c)(1)(B)) (CFCs), foreign personal holding companies (as defined in sec- tion 552(a)) (FPHCs), foreign investment companies (as defined in section 1246(b)) (FICs), and passive foreign investment companies (as defined in section 1297(a)) (PFICs). These rules are relevant prin- cipally because section 1(h)(11)(C)(iii) provides that dividends from a foreign corporation which for the taxable year of the corporation in which the dividend is paid, or the preceding taxable year, is an FPHC, a FIC, or a PFIC, are not qualified dividend income. Section 4 of this notice provides guidance withrespect to distribu- tions, inclusions, and other amounts from a CFC that is not also an FPHC, a FIC, or a PFIC. Section 5 of this notice provides guidance with respect to FPHCs, includ- ing FPHCs that are also CFCs. Section 6 of this notice provides guidance with re- spect to FICs, including FICs that are also CFCs. Section 7 of this notice provides guidance with respect to PFICs, including PFICs that are also CFCs. This notice provides that distributions of non-previously taxed earnings and profits from a CFC to an individual are qualified dividend income, and therefore are eligible for the reduced rates of tax applicable to certain capital gains under section 1(h)(1) of the Code, provided that the CFC is otherwise a qualified foreign corporation. This notice also provides that section 951(a)(1) inclusions from a CFC and deemed or actual distributions from an FPHC, a FIC or a PFIC are not qualified dividend income under section 1(h)(11)(B)(i)(II) and therefore are not eligible for the reduced rates of tax appli- cable to certain capital gains under section 1(h)(1). In addition, this notice provides that, for purposes of section 1(h)(11), the determination of whether a foreign corporation is a PFIC is made on a share- holder-by-shareholder basis. Accordingly, distributions of non-previously taxed earn- ings and profits received by an individual from a CFC that would be a PFIC with respect to that individual but for the ap- plication of section 1297(e) are qualified dividend income if the CFC is otherwise a qualified foreign corporation. SECTION 3. BACKGROUND .01The 2003 Act In general, section 1(h)(1) of the Code provides that an individual taxpayer’s net capital gain for any taxable year is sub- ject to a maximum tax rate of 15 percent (or 5 percent in the case of certain taxpay- ers). Section 1(h)(11) provides that, for purposes of section 1(h), the term “net cap- ital gain” means net capital gain increased by qualified dividend income. “Qualified dividend income” is de- fined as dividendsreceived during the taxable year from domestic corporations and qualified foreign corporations. Sec- tion 1(h)(11)(B)(i) of the Code. The term “qualified foreign corporation” does not include any foreign corporation that, for the taxable year ofthe corporation in which the dividend is paid, or the preced- ing taxable year, is an FPHC, a FIC, or a PFIC. Section 1(h)(11)(C)(iii). Subject to this limitation, the term “qualified foreign corporation” means any foreign corpora- tion that is incorporated in a possession of the United States or that is eligible for the benefits of a comprehensive income tax treaty with the United States which the Secretary determines is satisfactory for purposes of this provision and which includes an exchangeof information pro- gram. 1 Section 1(h)(11)(C)(i). In addition, a foreign corporation is treated as a qual- ified foreign corporation with respect to anydividendpaidbysuchcorporation if the stock with respect to which such dividend is paid is readily tradable on an established securitiesmarket in the United States. 2 Section 1(h)(11)(C)(ii). .02Anti-deferral Regimes under the Code Income earned by a foreign corpora- tion from its foreign operations generally is subject to U.S. tax when such income 1 SeeNotice 2003–69, 2003–42 I.R.B. 851 (providing the currentlist of U.S. tax treaties meeting these requirements). 2 SeeNotice 2003–71, 2003–43 I.R.B. 922 (defining “readily tradable” on an established securities market in the United States with respect to dividends receivedonorafterJanuary1,2003); Notice 2003–79, 2003–50 I.R.B. 1206 (defining “readily tradable” for securities other than ordinary or common stock). 2004–44 I.R.B.724November 1, 2004 is distributed to a U.S. person that holds stock in such foreign corporation. Accord- ingly, a U.S. person that is a shareholder of a foreign corporation generally is not sub- ject to U.S. tax on the income earned by the foreign corporation until that income is distributed to the shareholder as a divi- dend. However, a variety of anti-deferral regimes apply to subject the U.S. share- holder to U.S. tax on that income even if the income is not actually distributed to the shareholder. A brief summary of the rules applicable to foreign corporations subject to each of the anti-deferral regimes addressed in this notice is provided below. (1)CFCs. In general, a CFC is any foreign corporation with respect to which U.S. shareholders own more than 50 per- cent of the total combined voting power of all classes of stock of such corporation entitled to vote or the total value of such corporation. Under section 951(b) of the Code, a “United States shareholder” is a U.S. person (as defined in section 957(c)) that owns ten percent or more of the to- tal combined voting power of all classes of stock entitled to vote. United States shareholders of CFCs are required to include in gross income cur- rently theirpro ratashare of certain in- come of the CFC (referred to as “sub- part F income”), without regard to whether the income is distributed by the CFC to its shareholders in the year the income is earned. Section 951(a)(1)(A) of the Code. Subpart F income includes foreign base company income, including foreign per- sonal holding company income (e.g.,div- idends, interest, annuities and other spec- ified passive income), and certain insur- ance income. Sections 952, 953, and 954. United States shareholders of a CFC also are required to include currently in income theirpro ratashare of the CFC’s earn- ings to the extent invested by the CFC in U.S. property. Section 951(a)(1)(B). The amounts so included in income un- der section 951(a)(1) are limited to the shareholder’spro ratashare of the current earnings and profits of the CFC. Section 951(a)(2) and (c)(1)(A). Income of a CFC that has been included in the gross income of its United States shareholders as an inclusion under section 951(a)(1) of the Code is not included in gross income again when it actually is dis- tributed to the United States shareholders. Section 959(a)(1). Any income of a CFC that is not included in the gross income of its United States shareholders under sec- tion 951(a)(1) is not subject to U.S. tax as income of the United States shareholders until actually distributed as a dividend. A United States shareholder of a CFC that sells its stock in the CFC generally is re- quired to report any recognized gain from the sale of the stock as a dividend to the ex- tent of the untaxed undistributed earnings and profits of the CFC and certain sub- sidiaries that are attributable to the United States shareholder.Section 1248(a) and (c)(2). (2)FPHCs. A foreign corporation is an FPHC if (1) at any time during the taxable year more than 50 percent of the stock of the corporation, determined by vote or value, is owned by five or fewer individu- als who are U.S. citizens or residents; and (2) at least 60 percent of the corporation’s gross income for the taxable year is for- eign personal holding company income (e.g., dividends, interest, annuities and other specified passive income). Once a foreign corporation qualifies as an FPHC, however, the gross income threshold for each subsequent year is only 50 percent, until the expiration of either one taxable year during which the stock ownership requirement is not satisfied or three con- secutive taxable years in each of which the gross income requirement is not satisfied at the 50 percent threshold. Section 552(a) of the Code. All individual shareholders of an FPHC who are U.S. persons must include in gross income their distributive shares of undis- tributed foreign personal holding company income (as defined in section 556(a) of the Code) without regard to whether the income is distributed by the FPHC to its shareholders in the taxable year the in- come is earned. The undistributed foreign personal holding company income of an FPHC is the taxable income of the FPHC with adjustments minus the amount of the dividends paid deduction determined under section 561. Section 556(a). The undistributed foreign personal holding company income of an FPHC is treated as a dividend under section 551(b). Amounts that are deemed distributed as a dividend are treated as recontributed by the U.S. individual shareholders to the FPHC as a contribution to capital. (3)FICs. A foreign corporation is a FIC if (1) it is registered under the Invest- ment Company Act of 1940, either as a management company or as a unit invest- ment trust; or (2) it is engaged primar- ily in the business of investing, reinvest- ing, or trading in securities or commodi- ties, or in any interest in securities or com- modities, at a time when 50 percent or more of the total combined voting power of all classes of stock entitled to vote, or the value of all classes of stock, is held by U.S. persons. Section 1246(b) of the Code. Under the FIC rules, in general, gain on the sale or exchange (or a distribution that is treated as an exchange) of stock in a FIC is treated as ordinary income to the extent of the taxpayer’s ratable share of the post–1962 undistributed earnings and profits of the FIC. Section 1246(a). Any amount previously included in the gross income of the shareholder under section 951 is excluded from the shareholder’s rat- able share of the post–1962 undistributed earnings and profits of the FIC (but only to the extent the inclusion of such amount did not result in the exclusion of any other amount from gross income under section 959). A FIC that elected before 1963 to distribute annually 90 percent of its tax- able income (other than capital gains) is not subject to the general rules of section 1246(a) with respect to any year in which the election applies. Section 1247(a)(1); Section 1.1247–1(c)(1)oftheIncomeTax Regulations. Qualified shareholders (as defined in section 1247(c)) who invest in FICs that elected this treatment under sec- tion 1247 and for which the election is cur- rently in effect are required to include in in- come currently their share of the net long term capital gains of the FIC whether or not actually distributed. (4)PFICs. In general, a foreign corpo- ration is a PFIC if (1) 75 percent or more of its gross income for the taxable year con- sists of passive income; or (2) the aver- age percentage of assets held by the cor- poration during the taxable year that pro- duce, or are held for the production of, pas- sive income is 50 percent or more. Section 1297(a) of the Code. Subject to certain ex- ceptions, passive income generally means income of a kind that would be foreign per- sonal holding company income under sec- tion 954(c). Section 1297(b). In general, gain recognized by a U.S. person on the disposition of stock of a November 1, 20047252004–44 I.R.B. PFIC, or the amount of any excess distri- bution (as defined under section 1291(b)), is treated as ordinary income earnedpro rataover the shareholder’s holding period with respect to the PFIC stock. Amounts attributed to the current taxable year are included as ordinary income. Amounts at- tributed to prior years are subject to tax at the highest applicable tax rate in effect for each respective year of the holding period, and interest is imposed at the underpay- ment rate on the tax liability with respect to such amounts. As an alternative to being taxed under the rules of section 1291(a) of the Code, a shareholder that is a U.S. person may make a qualified electing fund (QEF) election under section 1295 of the Code or a mark to market election under section 1296. In general, a U.S. shareholder that makes a QEF election must include in gross income itspro ratashare of the QEF’s ordinary income and net capital gain for the tax- able year. Section 1293(a). A U.S. share- holder of a PFIC that makes a mark to market election must include in gross in- come for its taxable year as ordinary in- come the excess of the fair market value of the PFIC stock over its adjusted basis. Section 1296(c)(1). The adjusted basis of the shareholder’s stock is increased by the amount included in the gross income of the shareholder with respect to the stock. A foreign corporation may be treated as a PFIC with respect to some shareholders but not others. Under section 1298(b)(1), a foreign corporation generally is treated as a PFIC with respect to a shareholder even if the corporation does not meet the income or asset tests for the current year if the corporation met either the income test or the asset test during any portion of the shareholder’s holding period of the stock of the foreign corporation and the shareholder has not made a QEF election. 3 Under section 1297(e), a foreign corpora- tion is not treated as a PFIC with respect to a shareholder even if the corporation meets the income test or the asset test if the corporation is a CFC, the shareholder is a United States shareholder, and certain other conditions are met. SECTION 4. CONTROLLED FOREIGN CORPORATIONS This section provides guidance with re- spect to distributions, inclusions, and other amounts received by individual sharehold- ers from a CFC that is not also an FPHC, a FIC, or a PFIC (and that was not an FPHC, a FIC, or a PFIC in the preceding taxable year). The treatment of distributions, in- clusions, and other amounts received by individual shareholders of a CFC that is also an FPHC, a FIC, or a PFIC is ad- dressedinsections5,6,and7ofthisno- tice, respectively. Individual United States shareholders of CFCs may have amounts included in in- come under section 951(a)(1) of the Code, distributions of amounts previously taxed under section 951(a)(1), or distributions of amounts that have not been previously taxed under section 951(a)(1). The tax treatment of these amounts in the context of section 1(h)(11) is discussed below. .01Distributions of Amounts Not Previously Taxed Section 1(h)(11) of the Code does not exclude CFCs from the definition of “qual- ified foreign corporations.” Thus, actual dividends from a CFC’s non-previously taxed earnings and profits to an individual shareholder are qualified dividend income provided that the CFC is otherwise a qual- ified foreign corporation under section 1(h)(11)(C) and the other requirements of section 1(h)(11) are met. Similarly, amounts treated as dividends under sec- tion 1248(a) are qualified dividend income provided that the CFC is otherwise a qual- ified foreign corporation under section 1(h)(11)(C) and the other requirements of section 1(h)(11) are met. 4 Seesection 1248(a) (stating gain recognized on the sale or exchange of stock in certain for- eign corporations shall be included in the gross income of a shareholder as a divi- dend). In addition, amounts treated as div- idends under section 1.367(b)–2(e)(2) of the regulations (i.e., section 1248 amounts and all earnings and profits amounts) are qualified dividend income provided that the CFC is otherwise a qualified foreign corporation under section 1(h)(11)(C) and the other requirements of section 1(h)(11) are met. 5 .02Section 951(a)(1) Inclusions Neither section 951(a)(1) nor the cor- responding regulations characterize a section 951(a)(1) inclusion as a dividend. In contrast, deemed inclusions under the FPHC and PFIC regimes are characterized as dividends throughout the statutory pro- visions governing these regimes.See, e.g., section 551(b) (stating that undistributed foreign personal holding company income is included in a foreign personal holding company shareholder’s gross income as a dividend). Moreover, while section 1248 requires inclusions in gross income as a dividend, section 951 simply requires in- clusions in gross income. 6 Accordingly, for purposes of section 1(h)(11), section 951(a)(1) inclusions are not dividends and therefore cannot constitute qualified divi- dend income. .03Distributions of Previously Taxed Income Distributions of previously taxed in- come excluded from gross income under section 959(a) of the Code are not quali- fied dividend income because they are not subject to U.S. tax and are not dividends. Seesection 959(a) and (d). SECTION 5. FOREIGN PERSONAL HOLDING COMPANIES .01In General Section 1(h)(11)(C)(iii) of the Code ex- cludes FPHCs from the definition of qual- ified foreign corporation. Therefore, ac- tual dividends received by U.S. individ- 3 Section 1298(b)(1) also may not apply to a shareholder that has obtained a new holding period under section 1.1296–1(f) of the regulations by reason ofa mark-to-market election. 4 Amounts treated as dividends under section 1248(a) in the case of gain with respect to stock of a foreign corporation that was a CFC during the 5-year period prior to the disposition also may be qualified dividend income provided that theforeign corporation is otherwise a qualified foreign corporation under section 1(h)(11)(C) and the other requirements of section 1(h)(11) are met. Future guidance may address the treatment of section304 amounts and section 306(a)(2) amounts under section 1(h)(11). 5 Amounts treated as dividends under section 1.367(b)–2(e)(2) of the regulations with respect to foreign corporations that are not CFCs also may be qualified dividend income provided that the foreign corporation is otherwise a qualified foreign corporation under section 1(h)(11)(C) and the other requirements of section 1(h)(11) are met. Section 1.367(b)–3(c)(3). 6 It should be noted that, while section 951(a) was not modified by the 2003 Act, section 306(a)(1)(D) was modified to provide that, for purposes of section 1(h)(11), amounts treated as ordinary income under section 306 shall be treated as a dividend received from the corporation. 2004–44 I.R.B.726November 1, 2004 uals who are shareholders of an FPHC are not qualified dividend income. Simi- larly, undistributed foreign personal hold- ing company income that is treated as dis- tributed to individual U.S. shareholders as a dividend is not qualified dividend in- come. Further, a dividend from a foreign corporation that is not an FPHC but was an FPHC in the preceding taxable year is not qualified dividend income. .02FPHCs that are also CFCs A foreign corporation may be both an FPHC and a CFC. Because a foreign cor- poration that is both an FPHC and a CFC continues to be an FPHC, any dividends (both actual dividends and amounts treated as a dividend) received by an individual shareholder from that corporation are not qualified dividend income. SECTION 6. FOREIGN INVESTMENT COMPANIES .01In General Section 1(h)(11)(C)(iii) of the Code excludes FICs from the definition of qualified foreign corporation. Therefore, actual dividends received by U.S. indi- viduals who are shareholders of a FIC are not qualified dividend income. Likewise, ashareholder’spro ratashare of a FIC’s post–1962 accumulated earnings and prof- its following the sale of FIC stock is not qualified dividend income. Similarly, amounts distributed as ordinary income by a FIC that has a section 1247 election in effect also are not qualified dividend income. Further, a dividend from a for- eign corporation that is not a FIC but was a FIC in the preceding taxable year is not qualified dividend income. .02FICs that are also CFCs A foreign corporation may be both a FIC and a CFC. Because a foreign corpo- ration that is both a FIC and a CFC contin- ues to be a FIC, any dividends or other dis- tributions taxable as ordinary income from that corporation are not qualified dividend income. SECTION 7. PASSIVE FOREIGN INVESTMENT COMPANIES .01In General Section 1(h)(11)(C)(iii) of the Code ex- cludes PFICs from the definition of qual- ified foreign corporation. As a result, a dividend (including an excess distribution) from a foreign corporation that is a PFIC or that is not a PFIC in the current taxable year but was a PFIC in the preceding tax- able year is not qualified dividend income. Similarly, amounts included in a share- holder’s gross income under sections 1293(a) (in the case of a shareholder that has made a QEF election) or 1296 (in the case of a shareholder that has made a mark to market election) are not qualified dividend income. .02Determination of PFIC Status As noted above in Section 3.02(4), some of the rules for determining whether a foreign corporation is a PFIC operate on a shareholder-by-shareholder basis. Therefore, a foreign corporation may be treated as a PFIC with respect to some shareholders but not others. Thus, for pur- poses of section 1(h)(11), the result of an analysis of whether a foreign corporation is a PFIC, and therefore whether dividends from that corporation are for that reason excluded from qualified dividend income, may be different for shareholders of the same foreign corporation. A determination of whether a foreign corporation was a PFIC in the previous taxable year also should be made on a shareholder-by-shareholder basis if the shareholder of the foreign corporation was a shareholder in the previous taxable year. For example, a foreign corporation that was a PFIC under the income test or the asset test of section 1297(a) of the Code for one year of a shareholder’s holding period under certain circumstances may be a PFIC with respect to that shareholder even though it may not meet the income or asset tests in subsequent years and not- withstanding that the foreign corporation may not be a PFIC with respect to other shareholders. Section 1298(b)(1). To the extent a foreign corporation is a PFIC with respect to a shareholder, dividends received by that shareholder are not quali- fied dividend income. .03PFICs that are also CFCs A foreign corporation may be both a PFIC and a CFC. Except where section 1297(e) of the Code applies to certain shareholders as described below, in cases where a foreign corporation is both a PFIC and a CFC an amount received by a shareholder from such a corporation is not qualified dividend income. Where a foreign corporation is a CFC, section 1297(e)(1) of the Code provides that the foreign corporation generally is not treated as a PFIC with respect to a shareholder during the qualified portion of the shareholder’s holding period in the stock of the foreign corporation even if the corporation meets the income test or the asset test. The qualified portion generally is the portion of the shareholder’s holding period that is after December 31, 1997, and during which the shareholder is a United States shareholder and the foreign corpo- ration is a CFC. This overlap elimination rule does not apply if the foreign corpo- ration otherwise is treated as a PFIC un- der section 1298(b)(1) because there is a portion of the shareholder’s holding period prior to the application of this rule when the foreign corporation was a PFIC. H.R. Rep. No. 105–148, 105 th Cong., 1 st Sess., at 534 (1997). In cases where a foreign corporation would qualify as a PFIC with respect to a shareholder but for the application of sec- tion 1297(e) of the Code, for purposes of section 1(h)(11), distributions, inclusions, or amounts received by, or included in the income of, that shareholder from that for- eign corporation are subject to the same analysis as amounts from foreign corpo- rations that are CFCs and are not PFICs. Thus, in accordance with the guidance pro- vided for CFCs in Section 4 above, distri- butions of non-previously taxed earnings and profits received by an individual from a CFC that would be treated as a PFIC with respect to such individual but for the rule of section 1297(e) are qualified divi- dend income provided that the CFC is oth- erwise a qualified foreign corporation un- der section 1(h)(11)(C) and the other re- quirements of section 1(h)(11) are met. SECTION 8. EFFECTIVE DATE Regulations to be issued relating to the guidance set forth in this notice will be November 1, 20047272004–44 I.R.B. effective for amounts included in income on or after October 8, 2004. Until such regulations are issued, taxpayers may rely on this notice. SECTION 9. COMMENTS Comments should be submitted in writing and should include a reference to Notice 2004–70. Written comments may be submitted to CC:PA:LPD (Notice 2004–70), Room 5207, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washing- ton, D.C. 20044. Alternatively, interested parties may submit comments electron- ically via the following e-mail address: Notice.Comments@irscounsel.treas.gov. Please include “Notice 2004–70”inthe subject line of any electronic communica- tions. Submissions may be hand delivered Monday through Friday between the hours of8a.m. and4p.m. to: CC:PA:LPD (Notice 2004–70), Courier’s Desk, Inter- nal Revenue Service, 1111 Constitution Avenue, N.W., Washington, D.C. 20224. VI. CONTACT INFORMATION The principal author of this notice is Alexandra K. Helou of the Office of Asso- ciate Chief Counsel (International). How- ever, other personnel from the Service and the Treasury participated in its develop- ment. For further information regarding this notice, contact Phyllis Marcus at (202) 622–3840 (not a toll-free call). NOTE: This revenue procedure will be reprinted as the next revision of IRS Publication 1167,General Rules and Specifications for Substitute Forms and Schedules. Rev. Proc. 2004-62 TABLE OF CONTENTS PART 1 – INTRODUCTION TO SUBSTITUTE FORMS SECTION 1.1 – OVERVIEW OF REVENUE PROCEDURE 2004-62....................................................... 730 SECTION 1.2 – IRS CONTACTS..................................................................................... 731 SECTION 1.3 – WHAT’S NEW...................................................................................... 731 SECTION 1.4 – DEFINITIONS...................................................................................... 732 SECTION 1.5 – AGREEMENT...................................................................................... 733 PART 2 – GENERAL GUIDELINES FOR SUBMISSIONS AND APPROVALS SECTION 2.1 – GENERAL SPECIFICATIONS FOR APPROVAL........................................................ 734 SECTION 2.2 – HIGHLIGHTS OF PERMITTED CHANGES AND REQUIREMENTS...................................... 735 SECTION 2.3 – VOUCHERS........................................................................................ 735 SECTION 2.4 – RESTRICTIONS ON CHANGES...................................................................... 737 SECTION 2.5 – GUIDELINES FOR OBTAINING IRS APPROVAL....................................................... 737 SECTION 2.6 – OFFICE OF MANAGEMENT AND BUDGET (OMB) REQUIREMENTS FOR ALL SUBSTITUTE FORMS ................................................................................. 740 PART 3 – PHYSICAL ASPECTS AND REQUIREMENTS SECTION 3.1 – GENERAL GUIDELINES FOR SUBSTITUTE FORMS................................................... 741 SECTION 3.2 – PAPER............................................................................................. 743 SECTION 3.3 – PRINTING......................................................................................... 744 SECTION 3.4 – MARGINS.......................................................................................... 745 SECTION 3.5 – EXAMPLES OF APPROVED FORMATS............................................................... 745 SECTION 3.6 – MISCELLANEOUS INFORMATION FOR SUBSTITUTE FORMS......................................... 746 2004–44 I.R.B.728November 1, 2004 PART 4 – ADDITIONAL RESOURCES SECTION 4.1 – GUIDANCE FROM OTHER REVENUE PROCEDURES.................................................. 747 SECTION 4.2 – ORDERING PUBLICATIONS......................................................................... 747 SECTION 4.3 – ELECTRONIC TAX PRODUCTS...................................................................... 748 SECTION 4.4 – FEDERAL TAX FORMS ON CD-ROM................................................................. 748 PART 5 – REQUIREMENTS FOR SPECIFIC TAX RETURNS SECTION 5.1 – TAX RETURNS (FORM 1040, 1040A, 1120, etc.).......................................................... 749 SECTION 5.2 – CHANGES PERMITTED TO GRAPHICS (FORMS 1040A AND 1040)...................................... 750 SECTION 5.3 – CHANGES PERMITTED TO FORM 1040A GRAPHICS.................................................. 751 SECTION 5.4 – CHANGES PERMITTED TO FORM 1040 GRAPHICS................................................... 752 PART 6 – FORMAT AND CONTENT OF SUBSTITUTE RETURNS SECTION 6.1 – ACCEPTABLE FORMATS FOR SUBSTITUTE FORMS AND SCHEDULES................................. 753 SECTION 6.2 – ADDITIONAL INSTRUCTIONS FOR ALL FORMS...................................................... 754 PART 7 – MISCELLANEOUS FORMS AND PROGRAMS SECTION 7.1 – SPECIFICATIONS FOR SUBSTITUTE SCHEDULES K-1................................................. 755 SECTION 7.2 – PROCEDURES FOR PRINTING IRS ENVELOPES...................................................... 759 SECTION 7.3 – PROCEDURES FOR SUBSTITUTE FORMS 5471 AND 5472.............................................. 760 PART 8 – ALTERNATIVE METHODS OF FILING SECTION 8.1 – FORMS FOR ELECTRONICALLY FILED RETURNS.................................................... 762 SECTION 8.2 – EFFECT ON OTHER DOCUMENTS................................................................... 763 EXHIBITS Exhibit A-1 – Schedule A (Preferred Format)........................................................................... 764 Exhibit A-2 – Schedule A (Acceptable Format).......................................................................... 765 Exhibit B-1 – Schedule B (Preferred Format)........................................................................... 766 Exhibit B-2 – Schedule B (Acceptable Format).......................................................................... 767 Exhibit C-1 – Form 2106-EZ (Preferred Format)........................................................................ 768 Exhibit C-2 – Form 2106-EZ (Acceptable Format)....................................................................... 769 Exhibit D – Schedule K-1 (Form 1041) – Bar coded...................................................................... 770 Exhibit E – Schedule K-1 (Form 1065) – Bar coded...................................................................... 772 Exhibit F – Schedule K-1 (Form 1120S) – Bar coded..................................................................... 774 Exhibit G – Sample Checklist........................................................................................ 775 Exhibit H – List of Forms Referred to in the Revenue Procedure........................................................... 777 November 1, 20047292004–44 I.R.B. Part 1 Introduction to Substitute Forms Section 1.1 – Overview of Revenue Procedure 2004-62 1.1.1 Purpose The purpose of this revenue procedure is to provide guidelines and general requirements for the development, printing, and approval of substitute tax forms. Approval will be based on these guidelines. After review and approval,submitted forms will beaccepted as substitutes for official IRS forms. 1.1.2 Unique Forms Certain unique specialized forms require the use of other additional publications to supple- ment this publication. See Part 4. 1.1.3 Scope The IRS accepts quality substitute tax forms that are consistent with the official forms and do not have an adverse impact on our processing. The IRS Substitute Forms Unit administers the formal acceptance and processing of these forms nationwide. While this program deals primarily with paper documents, it also reviewsfor approval other processing and filing forms such as those used in electronic filing. Only those substitute forms that comply fully with the requirements set forth are acceptable. Exhibit H lists the forms mentioned in this document, their titles, and where their references are made. This revenue procedure is updated as required to reflect pertinent tax year form changes and to meet processing and/orlegislative requirements. 1.1.4 Forms Covered by This Revenue Procedure The following types of forms are covered by this revenue procedure: •IRS tax forms and their related schedules. •Worksheets as they appear in instruction packages. •Applications for permission to file returnselectronically and forms used as required docu- mentation for electronically filed returns. •Powers of Attorney. •Over-the-counter estimated tax payment vouchers. •Forms and schedules relating to partnerships, exempt organizations, and employee plans. 1.1.5 Forms Not Covered by This Revenue Procedure The following types of forms are not covered by this revenue procedure: •W-2 and W-3 (see Publication 1141 for information on these forms). •W-2c and W-3c (see Publication 1223 for information on these forms). •1096, 1098 series, 1099 series, 5498 series, W-2G, and 1042-S (see Publication 1179 for information on these forms). •Federal Tax Deposit (FTD) coupons, which may not be reproduced. •Forms 1040-ES (OCR) and 1041-ES (OCR), which may not be reproduced. •Forms 5500, 5500-EZ, and associated schedules (see the Department of Labor website ( www.dol.gov)for information on these forms). •Requests for information or documentation initiated by the IRS. •Forms used internally by the IRS. •State tax forms. •Forms developed outside the IRS. 2004–44 I.R.B.730November 1, 2004 •General and Specific Instructions are not reviewed by the Substitute Forms Program Unit. Section 1.2 – IRS Contacts 1.2.1 Where To Send Substitute Forms Send your substitute forms for approval to thefollowing offices (Do not send forms with taxpayer data): FormOffice and Address FINCEN Form 101, FINCEN Form 102, FINCEN Form 103, FINCEN Form 103-N, FINCEN Form 104, 8300, TD F 90-22.1, TD F 90-22.47, TD F 90-22.53, TD F 90-22.55, TD F 90-22.56 IRS Computing Center BSA Compliance Branch P.O. Box 32063 Detroit, MI 48232-0063 5500, 5500-EZ, and Schedules A through E, G, H, I, P, R, SSA, and T for Form 5500 Check EFAST information at the Department of Labor’s website at w ww.efast.dol.gov All others (except W-2, W-2c, W-3, W-3c, 1096, 1098, 1099, 5498, W-2G, and 1042-S) Internal Revenue Service Attn: Substitute Forms Program SE:W:CAR:MP:T:T:SP 1111 Constitution Avenue, NW Room 6406 Washington, DC 20224 In addition, the Substitute Forms Program Unit can be contacted via email at * taxforms@irs.gov. Please enter “Substitute Forms” on the subject line. Use this email address only to inquire about forms covered by this revenue procedure. Do not attach graphic files for approval with email. For questions about Forms W-2 and W-3, refer to IRS Publication 1141,General Rules and Specifications for Substitute Forms W-2 and W-3. For Forms W-2c and W-3c, refer to IRS Publication 1223,General Rules and Specifications for Substitute Forms W-2c and W-3c.For Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S, refer to IRS Publication 1179,General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S. Section1.3–What’sNew 1.3.1 What’s New The following changes have been madeto the Revenue Procedure for 2004: •The Substitute Forms Program is now accepting substitute forms submissions via email. The email address is* taxforms@irs.gov. See Section 2.1.2. •The Substitute Forms Program office symbols have changed to SE:W:CAR:MP:T:T:SP. The room number has changed to 6406. •Exhibits D through G have been rearranged. •The formats for Schedules K-1 of Forms 1065 and 1120S have significantly changed for 2004. Because Publication 1167 is printed before the forms become finalized, draft copies are provided in the exhibits (see Exhibits D,E, and F). Before releasing their substitute forms, software vendors are responsible for making any subsequent changes made to the final official IRS forms after the draft forms have been posted. November 1, 20047312004–44 I.R.B. •The requirements for Schedules K-1 of Forms 1041, 1065, 1065-B and 1120S have changed. Among other changes, all linesmust now be included on the substitute schedules. (See Section 7.1 and Exhibits D, E and F). Section 1.4 – Definitions 1.4.1 Substitute Form A tax form (or related schedule) that differsinanywayfromtheofficialversionandis intended to replace the form that is printed and distributed by the IRS. This term also covers those approved substitute forms exhibited in this revenue procedure. 1.4.2 Printed/Preprinted Form A form produced using conventional printing processes, or a printed form which has been reproduced by photocopying or a similar process. 1.4.3 Preprinted Pin-Fed Form A printed form that has marginal perforations for use with automated and high speed print- ing equipment. 1.4.4 Computer Prepared Substitute Form A preprinted form in which the taxpayer’s tax entry information has been inserted by a com- puter, computer printer, or other computer type equipment such as word processing equipment. 1.4.5 Computer Generated Substitute Tax Return or Form A tax return or form that is entirely designed and printed using a computer printer such as a laser printer, etc., on plain white paper. This return or form must conform to the physical layout of the corresponding IRS form, although the typeface may differ. The text should match the text on the officially printed form as closely aspossible. Condensed text and abbreviations will be considered on a case-by-case basis. Exception.All jurat (perjury statements) must be reproduced verbatim. 1.4.6 Manually Prepared Form A preprinted reproduced form in which the taxpayer’s tax entry information is entered by an individual using a pen, pencil, typewriter, or other non-automated equipment. 1.4.7 Graphics Parts of a printed tax form that are not tax amount entries or required information. Examples of graphics are line numbers, captions, shadings,special indicators, borders, rules, and strokes created by typesetting, photographics, photocomposition, etc. 1.4.8 Acceptable Reproduced Form A legible photocopy of an original form. 2004–44 I.R.B.732November 1, 2004 1.4.9 Supporting Statement (Supplemental Schedule) A document providing detailed information to support a line entry on an official or approved substitute form and filed with (attached to) a tax return. Note.A supporting statement is not a tax form and does not take the place of an official form unless specifically permitted elsewhere in this procedure. 1.4.10 Specific Form Terms The following specific terms are used throughout this revenue procedure in reference to all substitute forms: format, sequence, line reference, item caption, and data entry field. 1.4.11 Format The overall physical arrangement and general layout of a substitute form. 1.4.12 Sequence Sequence is an integral part of the total format requirement. The substitute form should show the same numeric and logical placement order of data, as shown on the official form. 1.4.13 Line Reference The line numbers, letters, or alphanumericsused to identify each captioned line on an offi- cial form. These line references are printedto the immediate left of each caption or data entry field. 1.4.14 Item Caption The text on each line of a form, which identifies the data required. 1.4.15 Data Entry Field Designated areas for the entry of data such as dollar amounts, quantities, responses and checkboxes, etc. 1.4.16 Advance Draft A draft version of a new or revised form may be posted to the IRS website for information purposes. Substitute forms may be submittedbased on these advance drafts, but any company that receives forms approval based on these earlydrafts is responsible for monitoring and re- vising forms to mirror any revisions in the final forms provided by the IRS. Section 1.5 – Agreement 1.5.1 Important Stipulation of This Revenue Procedure Any person or company who uses substitute forms and makes all or part of the changes specified in this revenue procedure agrees to the following stipulations: •The IRS presumes the changes are made in accordance with these procedures and will not be disruptive to the processing of the tax return. •Should any of the changes prove to be not exactly as described, and as a result become disruptive to the IRS’s processing of the taxreturn, the person or company agrees to accept the determination of the IRS as to whether or not the form may continue to be used during the filing season. •The person or company agrees to work with the IRS in correcting noted deficiencies. No- tification of deficiencies may be made by any combination of fax, letter, email, or phone November 1, 20047332004–44 I.R.B. contact and may include the return of unacceptable forms for re-submission of acceptable forms. Part 2 General Guidelines for Submissions and Approvals Section 2.1 – General Specifications for Approval 2.1.1 Overview If you produce any tax forms using IRS guidelines on permitted changes, you can generate your own substitutes without further approval. If your changes are more extensive, you must get IRS approval before using substitute forms. These changes include the use of typefaces and sizes other than those found on the official form and the condensing of line item descriptions to save space. 2.1.2 Email Submissions The Substitute Forms Program is now accepting substitute forms submissions via email. The email address is* taxforms@irs.gov. Please include “PDF Submissions” on the subject line. Follow these guidelines: •Your submission should include all the forms you wish to submit in one attached pdf file. Do not email each form individually. •Emailing pdf submissions will not expedite review and approval. The pdf submissions will be assigned a control number and put in queuealong with mailed-in paper submissions. •Small (fewer than 15 forms), rather than large submissions should expedite processing. •Optimize pdf files before submitting. •The maximum allowable email attachment is 2.5 megabytes. •The Substitute Forms Unit will accept zip files. •An approval checklist listing the forms you are submitting should always be included in the pdf file along with the forms. •To alleviate delays during the peak time of September through December, submit advance draft forms as early as possible. If the guidelines are not followed, you may need to resubmit. In addition to submitting forms via email,you may continue to send your submissions to: Internal Revenue Service SE:W:CAR:MP:T:T:SP Attn: Substitute Forms Program 1111 Constitution Avenue, NW Room 6406 Washington, DC 20224 2004–44 I.R.B.734November 1, 2004 2.1.3 Schedules Schedules are considered to be an integral part of a complete tax return. A schedule may be included as part of a form or printed separately. 2.1.4 Examples of Schedules That Must Be Submitted with the Return Form 706,United States Estate (and Generation-Skipping Transfer) Tax Return,isanex- ample of this situation. Its Schedules A through U have pages numbered as part of the basic return. For Form 706 to be approved, the entire form including Schedules A through U must be submitted. 2.1.5 Examples of Schedules That Can Be Submitted Separately However, Schedules 1, 2, and 3 of Form 1040A are examples of schedules that can be sub- mitted separately. Although printed by the IRS as a supplement to Form 1040A, none of these schedules are required to be filed with Form 1040A. These schedules may be separated from Form 1040A and submitted as substitute forms. 2.1.6 Use and Distribution of Unapproved Forms The IRS is continuing a program to identify and contact tax return preparers, forms devel- opers, and software publishers who use or distribute unapproved forms that do not conform to this revenue procedure. The use of unapproved forms hinders the processing of the returns. Section 2.2 – Highlights of Permitted Changes and Requirements 2.2.1 Methods of Reproducing Internal Revenue Service Forms Official IRS tax forms are supplied by the IRS. These forms may be provided in the tax- payer’s tax package or over-the-counter. Forms can also be picked up at many IRS offices, post offices, or libraries, and are available on CD-ROM and on-line via the Internet. There are methods of reproducing IRS printed tax forms suitable for use as substitutes with- out prior approval. •You can photocopy most tax forms and use them instead of the official ones. The entire substitute form, including entries, must be legible. •You can reproduce any current tax form as cutsheets, snap sets, and marginally punched, pin-fed forms as long as you use an official IRS version as the master copy. •You can reproduce a “signature form” as a valid substitute form. Many tax forms (including returns) have a taxpayer signature requirement as part of the form layout. The jurat/perjury statement/signature line areas must be retained and worded exactly as on the official form. The requirement for a signature by itself does not prohibit a tax form from being properly computer-generated. Section 2.3 – Vouchers 2.3.1 Overview All payment vouchers (Forms 940-V, 940-EZ(V), 941-V, 943-V, 945-V, 1040-V, and 2290-V) must be reproduced in conjunction with their forms. Substitute vouchers must be the same size as the officially printed vouchers. Vouchers that are prepared for printing on a laser printer may include a scan line. November 1, 20047352004–44 I.R.B. 2.3.2 Scan Line Specifications NNNNNNNNN AAAAAA NNN NNNNNN NNN Item:AB CDEFG A.Social Security Number/Employer Identification Number (SSN/EIN) has 9 numeric spaces. B.Check Digits have 2 alpha spaces. C.Name Control has 4 alphanumeric spaces. D.Master File Tax (MFT) Code has 2 numeric spaces (see below). E.Taxpayer Identification Number (TIN) Type has 1 numeric space (see below) F.Tax Period has six numeric spaces in year/month format (YYYYMM). G.Transaction Code has 3 numeric spaces. 2.3.3 MFT Code Code Number for Forms: •1040 family – 30; •940/940-EZ – 10; •941 – 01; •943 – 11; •945 – 16; and •2290 – 60. 2.3.4 TIN Type Type Number for: •Form1040family–0;and •Forms 940, 940-EZ, 941, 943, 945, and 2290 – 2. 2.3.5 Voucher Size The voucher size must be exactly 8.0′′x3.25′′(Forms 1040-ES and 1041-ES must be 7.625′′ x3.0′′). The document scan line must be vertically positioned 0.25 inches from the bottom of the scan line to the bottom of the voucher. The last character on the right of the scan line must be placed 3.5 inches from the right leading edge of the document. The minimum required horizontal clear space betweencharacters is .014 inches. The line to be scanned must have a clear band 0.25 inches in height from top to bottom of the scan line, and from border to border of the document. “Clear band” means no printing except for dropout ink. 2.3.6 Print and Paper Weight Vouchers must be imaged in black ink using OCR A, OCR B, or Courier 10. These fonts may not be mixed in the scan line. The horizontal character pitch is 10 CPI. The paper must be 20 to 24 pound OCR bond paper weight. 2004–44 I.R.B.736November 1, 2004 Section 2.4 – Restrictions on Changes 2.4.1 What You Cannot Do to Forms Suitable for Substitute Tax Forms You cannot, without prior IRS approval, change any IRS t ax form or use your own (non- approved) versions including graphics, unless specif ically permitted by this revenue procedure. You cannot adjust any of the graphics on Forms 1040, 1040A, and 1040EZ (except in those areas specified in Part 5 of this revenue procedure) without prior approval from the IRS Sub- stitute Forms Unit. You cannot use your own preprinted label on tax returns filed with the IRS unless you fully comply with the criteria specified in the section in this revenue procedure on the use of pre- addressed IRS labels. Section 2.5 – Guidelines for Obtaining IRS Approval 2.5.1 Basic Requirements Preparers who submit substitute privately designed, privately printed, computer generated, or computer prepared tax forms must develop these substitutes using the guidelines established in this part. These forms, unless excepted by the revenue procedure, must be approved by the IRS before being filed. 2.5.2 Conditional Approval Based on Advanced Drafts The IRS cannot grant final approval of your substitute form until the official form has been published. However, the IRS has established a location on the Internet for posting advance draft forms. This site can be reached in the “Tax Professionals” area at: w ww.irs.gov/taxpros/lists/0,,id=97782,00.html We encourage submission of proposed substitutes of these advance draft forms, and will grant conditional approval based solely on these early drafts. These advance drafts are subject to significant change before forms are finalized. If these advance drafts are used as the basis for your substitute forms, you will be responsible for subsequently updating your final forms to agree with the final official version. These revisions need not be submitted for further approval. Note.Approval of forms based on advance drafts will not be granted after the final version of an official form is published. 2.5.3 Submission Procedures Please follow these general guidelines whensubmitting substitute forms for approval: •Any alteration of forms must bewithin the limits acceptable to the IRS. It is possible that, from one filing period to another, a change in law or a change in internal need (processing, audit, compliance, etc.) may change the allowable limits for the alteration of the official form. •When specific approval of any substitute form(other than those specified in Part 1, Sec- tion 1.2 – IRS Contacts) is desired, a sample of the proposed substitute form should be forwarded for consideration by letter to the Substitute Forms Unit at the address shown in Section 1.2. •To expedite multiple forms approval, we prefer that your proposed forms be submitted in separate sets by return. For example, Forms 1040 and their normally related schedules or attachments should be submitted separately from Forms 1120 and 1065 if possible. Sched- ules and forms (for example, Forms 3468, 4136, etc.) that can be used with more than one November 1, 20047372004–44 I.R.B. type of return (for example, 1040, 1041, 1120, etc.) should be submitted only once for ap- proval, regardless of the number of different tax returns with which they may be associated. Also, all pages of multi-page forms or returns should be submitted in the same package. 2.5.4 Approving Offices Because only the Substitute Forms Unit is authorized to approve substitute forms, unnec- essary delays may occur if forms are sent to the wrong office. The Substitute Forms Unit may then coordinate the response with the initiator responsible for revising that particular form. Such coordination may include allowing the initiator to officially approve the form. No IRS office is authorized to allow deviations from this revenue procedure. 2.5.5 IRS Review of Software Programs, etc. The IRS does not review or approve the logic of specific software programs, nor does the IRS confirm the calculations on the forms produced by these programs. The accuracy of the program remains the responsibility of the software package developer, distributor, or user. The Substitute Forms Unit is primarily concerned with the pre-filing quality review of the final forms, produced by whatever means, thatare expected to be processed by IRS field of- fices. For these, you should submit forms without including any taxpayer information such as names, addresses, monetary amounts, etc. 2.5.6 When To Send Proposed Substitutes Proposed substitutes, which are required to be submitted per this revenue procedure, should be sent as much in advance of the filing period as possible. This is to allow adequate time for analysis and response. 2.5.7 Accompanying Statement When submitting sample substitutes, you should include an accompanying statement that lists each form number and its changes from the official form (position, arrangement, appear- ance, line numbers, additions, deletions, etc.). With eachof the items you should include a detailed reason for the change. When requesting approval, please include a checklist. Checklists expedite the approval process. The checklist may look like the example in Exhibit G displayed in the back of this procedure or may be one of your own design. Please include your fax number on the checklist. 2.5.8 Approval/Non- Approval Notice The Substitute Forms Unit will fax the checklist or an approval letter to the originator if a fax number has been provided, unless: •The requester has asked for a formal letter; or •Significant corrections to the submitted forms are required. Notice of approval may contain qualifications for use of the substitutes. Notices of unap- proved letters may specify the changes required for approval, and may also require re-submis- sion of the form(s) in question. Telephone contact is used when possible. 2.5.9 Duration of Approval Most signature tax returns and many of their schedules and related forms have the tax (li- ability) year printed in the upper right corner. Approvals for these forms are usually good for one calendar year (January through December of the year of filing). Quarterly tax forms in the 940 series and Form 720 require approval for any quarter in which the form has been revised. 2004–44 I.R.B.738November 1, 2004 Because changes are made to a form every year, each new filing season generally requires a new submission of a form. Very rarely is updating the preprinted year the only change made to a form. 2.5.10 LimitedContinuedUse of an Approved Change Limited changes approved for one tax year may be allowed for the same form in the follow- ing tax year. Examples of such limitations and requirements are the use of abbreviated words, revised form spacing, compressed text lines, and shortened captions, etc., which do not change the consistency of lines or text on the official forms. If substantial changes are made to the form, new substitutes must be submitted for approval. If only minor editorial changes are made to the form, it is not subject to review. It is the re- sponsibility of each vendor who has been granted permission to use substitute forms to monitor and revise forms to mirror any revisions to official forms made by the Service. If there are any questions, please contact the Substitute Forms Unit. 2.5.11 When Approval Is Not Required If you received written approval for a specific change on a form last year, such as deleting the vertical lines used to separate dollars and cents, you may make the same change this year if the item is still present on the official form. •The new substitute form does not have to be sent to the IRS and written approval is not required. •However, the new substitute form must conform to the official current year IRS form in other respects: date, Office of Management and Budget (OMB) approval number, attach- ment sequence number, Paperwork Reduction Act Notice statement, arrangement, item caption, line number, line reference, data sequence, etc. •The new substitute must also comply with this revenue procedure. The procedure may have eliminated, added to, or otherwise changed the guideline(s) that affected the change approved last year. •An approved change is authorized only for the period from a prior tax year substitute form to a current tax year substitute form. Exception.Forms with temporary, limited, or interim approvals (or with approvals that state a change is not allowed in any other tax year) are subject to review in subsequent years. 2.5.12 Continuous Use Forms Forms without preprinted tax years are called “continuous use” forms. Continuous use forms are revised when a legislative change affects the form or a change will facilitate process- ing. These forms may have revision datesthat are valid for longer than one year. 2.5.13 Internet Program Chart A chart of print dates (for annual and quarterly forms) and most current revision dates (for continuous use forms) will be maintained on the Internet. For further details, see Section 4.3.1 on access for the Internet and the Official Forms Release Schedule. 2.5.14 Required Copies Generally, you must send us one copy of each form being submitted for approval. However, if you are producing forms for different computer systems (for example, IBM compatible vs. Macintosh) or different types of printers (for example, laser vs. inkjet), and these forms differ significantly in appearance, submit one copy for each type of system or printer. November 1, 20047392004–44 I.R.B. 2.5.15 Requestor’s Responsibility Following receipt of an initial approval for a substitute forms package or a software output program to print substitute forms, it is the responsibility of the originator (designer or distrib- utor) to provide client firms or individuals with forms that meet the IRS’s requirements for continuing acceptability.Examples of this responsibility include: •Using the prescribed print paper, font size,legibility, state tax data deletion, etc. •Informing all users of substitute forms of thelegal requirements of the Paperwork Reduc- tion Act Notice, which is generally found in the instructions for the official IRS forms. 2.5.16 Source Code The Substitute Forms Unit, SE:W:CAR:MP:T:T:SP, will assign a unique source code to each firm that submits substitute paper forms forapproval. This source code will be a permanent identifier that should be used on every submission by a particular firm. The source code: •Consists of three alpha characters. •Should be printed at the bottom left margin area on the first page of every approved sub- stitute form. •Should not be used on optically scanned (OCR) forms. Section 2.6 – Office of Management and Budget (OMB) Requirements for All Substitute Forms 2.6.1 OMB Requirements for All Substitute Forms There are legal requirements of the Paperwork Reduction Act of 1995 (The Act). Public Law 104-13 requires that: •OMB approve all IRS tax forms that are subject to the Act, •Each IRS form contains (in the upper right corner) the OMB number, if any, and •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. This information must be provided to every user of official or substitute tax forms. 2.6.2 Application of the Paperwork Reduction Act On forms that have been assigned OMB numbers: •All substitute forms must contain in the upper right corner the OMB number that is on the official form. •The required format is: OMB No. 1545-XXXX (Preferred) or OMB # 1545-XXXX (Ac- ceptable). 2.6.3 Required Explanation to Users You must inform the users of your substitute forms of the IRS use and collection require- ments stated in the instructions for official IRS forms. •If you provide your users or customers with the official IRS instructions, each form must retain either the Paperwork Reduction Act Notice (or Disclosure, Privacy Act, and Pa- perwork Reduction Act Notice), or a reference to it as the IRS does on the official forms (usually in the lower left corner of the forms). •This notice reads, in part, “We ask for the information on this form to carry out the Internal Revenue laws of the United States...” 2004–44 I.R.B.740November 1, 2004 Note.If the IRS instructions are not provided tousers of your forms, the exact text of the Paperwork Reduction Act Notice (or Disclosure, Privacy Act, and Paperwork Reduction Act Notice) must be furnished separately or on the form. 2.6.4 Finding the OMB Number and Paperwork Reduction Act Notice The OMB number and the Paperwork Reduction Act Notice, or references to it, may be found printed on an official form (or its instructions). The number and the notice are included on the official paper format and in other formats produced by the IRS (for example, compact disc (CD) or Internet download). Part 3 Physical Aspects and Requirements Section 3.1 – General Guidelines for Substitute Forms 3.1.1 General Information The official form is the standard. Because a substitute form is a variation from the official form, you should know the requirements of the official form for the year of use before you modify it to meet your needs. The IRS provides several means of obtaining the most frequently used tax forms. These include the Internet, fax-on-demand, and CD-ROM (see Part 4). 3.1.2 Design Each form must follow the design of the official form as to format arrangement, item cap- tion, line numbers, line references, and sequence. 3.1.3 State Tax Information Prohibited State tax information must not appear on the federal tax return, associated form, or schedule that is filed with the IRS. Exceptions occur when amounts are claimed on, or required by, the federal return (for example, state and local income taxes, on Schedule A of Form 1040). 3.1.4 Vertical Alignment of Amount Fields IF a form is to be...THEN... 1.The column must have a vertical line or some type of indicator in the amount field to separate dollars from cents if the official form has a vertical line. Manually prepared 2.The cents column must be at least 3/10′′wide. 1.Vertically align the amountentry fields where possible. 2.Use one of the following amount formats: a) 0,000,000. Computer generated b) 0,000,000.00 November 1, 20047412004–44 I.R.B. IF a form is to be...THEN... 1.You may remove the vertical line in the amount field that separates dollars from cents. 2.Use one of the following amount formats: a) 0,000,000. Computer prepared b) 0,000,000.00 3.1.5 Attachment Sequence Number Many individual income tax forms have a required “attachment sequence number” located just below the year designation in the upper right corner of the form. The IRS uses this number to indicate the order in which forms are to be attached to the tax return for processing. Some of the attachment sequence numbers may change from year to year. On computer prepared forms: •The sequence number may be printed in no less than 12-point boldface type and centered below the form’s year designation. •The sequence number may alsobe placed following the year designation for the tax form and separated with an asterisk. •The actual number may be printed without labeling it the “Attachment Sequence Number.” 3.1.6 Paid Preparer’s Information and Signature Area On Forms 1040EZ, 1040A, 1040, and 1120, etc., the “Paid Preparer’s Use Only” area may not be rearranged or relocated. You may, however,add three extra lines to the paid preparer’s address area without prior approval. This applies to other tax forms as well. 3.1.7 Assembly of Forms If developing software or forms for use by others, please inform your customers/clients that the order in which the forms are arranged may affect the processing of the package. A return must be arranged in the order indicated below. IF the form is...THEN the sequence is... 1040• Form 1040. • Schedules and forms in attachment sequence number order. Anyothertaxreturn (Form 1120, 1120S, 1065, 1041, etc.) • The tax returns. • Directly associated schedules (Schedule D, etc.). • Directly associated forms. • Additional schedules in alphabetical order. • Additional forms in numerical order. Supporting statements should then follow in the same sequence as the forms they support. Additional information required should be attached last. In this way, the forms are received in the order in which they must be processed. If you do not send returns to us in order, processing may be delayed. 2004–44 I.R.B.742November 1, 2004 Section 3.2 – Paper 3.2.1 Paper Content The paper must be: •Chemical wood writing paper that is equal to or better than the quality used for the official form, •At least 18 pound (17′′x22′′, 500 sheets), or •At least 50 pound offset book (25′′x38′′, 500 sheets). 3.2.2 Paper with Chemical Transfer Properties There are several kinds of paper prohibited for substitute forms. These are: 1. Carbon-bonded paper 2. Chemical transfer paper except when the following specifications are met: a. Each ply within the chemical transfer set of forms must be labeled. b. Only the top ply (ply one and white in color), the one that contains chemical on the back only (coated back), may be filed with the IRS. 3.2.3 Example A set containing three plies would be constructed as follows:ply one (coated back), “Fed- eral Return, File with IRS”; ply two (coated front and back), “Taxpayer’s copy”; and ply three (coated front), “Preparer’s copy.” The file designation, “Federal Return, File with IRS” for ply one, must be printed in the bottom right margin (just below the last line of the form) in 12- point boldface type. It is not mandatory, but recommended, that the file designation “Federal Return, File with IRS” be printed in a contrasting ink for visual emphasis. 3.2.4 Carbon Paper Do not attach any carbon paper to any return you file with the IRS. 3.2.5 Paper and Ink Color We prefer that the color and opacity of paper substantially duplicatesthat of the original form. This means that your substitute must be printed in black ink and may be on white or on the colored paper the IRS form is printed on. Forms 1040A and 1040 substitute reproductions may be in black ink without the colored shading. The only exception to this rule is Form 1041-ES, which should always be printed with a very light gray shading in the color screened area. This is necessary to assist us in expeditiously separating this form from the very similar Form 1040-ES. 3.2.6 Page Size Substitute or reproduced forms and computer prepared/generated substitutes may be the same size as the official form or they may be the standard commercial size (8 1 /2′′x11′′). The thickness of the stock cannot be less than .003 inches. November 1, 20047432004–44 I.R.B. Section 3.3 – Printing 3.3.1 Printing Medium The private printing of all substitute tax forms must be by conventional printing processes, photocopying, computer graphics, or similar reproduction processes. 3.3.2 Legibility All forms must have a high standard of legibility as to printing, reproduction, and fill-in matter. Entries of taxpayer data may be no smaller than eight points. The IRS reserves the right to reject those with poor legibility. The ink and printing method used must ensure that no part of a form (including text, graphics, data entries, etc.) develops “smears” or similar quality deterioration. This includes any subsequent copies or reproductions made from an approved master substitute form, either during preparation or during IRS processing. 3.3.3 Type Font Many federal tax forms are printed using “Helvetica” as the basic type font. We request that you use this type font when composing substitute forms. 3.3.4 Print Spacing Substitute forms should be printed using a 6 lines/inch vertical print option. They should also be printed horizontally in 10 pitch pica (that is, 10 print characters per inch) or 12 pitch elite (that is, 12 print positions per inch). 3.3.5 Image Size The image size of a printed substitute form should be as close as possible to that of the official form. You may omit any text on both computer prepared and computer generated forms that is solely instructional. 3.3.6 Title Area Changes To allow a large top margin for marginal printing and more lines per page, the title line(s) for all substitute forms (not including the form’s year designation and sequence number, when present), may be photographically reduced by40 percent or reset as one line of type. When reset as one line, the type size may be no smaller than 14-point. You may omit “Department of the Treasury, Internal Revenue Service” and all reference to instructions in the form’s title area. 3.3.7 Remove Government Printing Office Symbol and IRS Catalog Number When privately printing substitute tax forms, the Government Printing Office (GPO) sym- bol and/or jacket number must be removed. In the same place, using the same type size print the Employer Identification Number (EIN), theSocial Security Number (SSN) of the printer or designer, or the IRS assigned source code. (We prefer this last number be printed in the lower left area of the first page of each form.) Also, remove the IRS Catalog Number (Cat. No.) if one is present in the bottom center margin, and the recycle symbol if the substitute is not produced on recycled paper. 3.3.8 Printing on One Side of Paper While it is preferred that both sides of the paper be used for substitutes and reproduced forms, resulting in the same page arrangement as that of the official form or schedule, the IRS will not reject your forms if only one side of the paper is used. 2004–44 I.R.B.744November 1, 2004 3.3.9 Photocopy Equipment The IRS does not undertake to approve or disapprove the specific equipment or process used in reproducing official forms. Photocopies of forms must be entirely legible and satisfy the conditions stated in this and other revenue procedures. 3.3.10 Reproductions Reproductions of official forms and substitute forms that do not meet the requirements of this revenue procedure may not be filed instead of the official forms. Illegible photocopies are subject to being returned to the filer for re-submission of legible copies. 3.3.11 Removal of Instructions You may remove references to instructions. No prior approval is needed. Exception.The words “For Paperwork Reduction Act Notice, see instructions” must be retained or a similar statement provided on each form. Some forms refer the taxpayer to a page number in the instructions for information on the Paperwork Reduction Act Notice. Section 3.4 – Margins 3.4.1 Margin Size The format of a reproduced tax form when printed on the page must have margins on all sides at least as large as the margins on the official form. This allows room for IRS employees to make necessary entries on the form during processing. •A 1 /2-inch to 1 /4-inch margin must be maintained across the top, bottom, and both sides of all substitute forms. •The marginal, perforated strips containing pin-fed holes must be removed from all forms priortofilingwiththeIRS. 3.4.2 Marginal Printing Prior approval is not required for the marginal printing allowed when printed on an official form or on a photocopy of an official form. •With the exception of the actual tax forms (for example, Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc.), you may print in the left vertical margin and in the left half of the bottom margin. •Printing is never allowed in the top right margin of the tax form (for example, Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc.). The Service uses this area to imprint a Document Locator Number for each return. There are no exceptions to this requirement. Section 3.5 – Examples of Approved Formats 3.5.1 Examples of Approved Formats From the Exhibits Three sets of exhibits (Exhibits A-1, 2; B-1, 2; and C-1, 2) are at the end of this revenue procedure as examples of how these guidelines may be used. Vertical spacing is six (6) lines to the inch. A combination of upper-case and lower-case print font is acceptable in producing substitute forms. ThesamelogicmaybeappliedtoanyIRSformthat is normally reproducible as a substitute form, with the exception of the tax return forms as discussed elsewhere. These exhibits may be from a prior year and are not to be used as current substitute forms. November 1, 20047452004–44 I.R.B. Section 3.6 – Miscellaneous Information for Substitute Forms 3.6.1 Filing Substitute Forms To be acceptable for filing, a substitute form must print out in a format that will allow the filer to follow the same instructions as for filing official forms. These instructions are in the taxpayer’s tax package or in the related form instructions. The form must be on the appropri- ately sized paper, legible, and include a jurat, where one appears on the published form. 3.6.2 Caution to Software Publishers The IRS has received returns produced by software packages with approved output where either the form heading was altered or the lines were spaced irregularly. This produces an illegible or unrecognizable return or a return with the wrong number of pages. We realize that many of these problems are caused by individual printer differences but they may delay input of return data and, in some cases, generate correspondence to the taxpayer. Therefore, in the instructions to the purchasers of your product, both individual and professional, please stress that their returns will beprocessed more efficiently if they are properly formatted. This includes: •Having the correct form numbers and titles at the top of the return, and •Submitting the same number of pages as if the form were an official IRS form with the line items on the proper pages. 3.6.3 Use Pre-Addressed IRS Label If you are a practitioner filling out a return for a client or a software publisher who prints instruction manuals, stress the use of the pre-addressed label provided in the tax package the IRS sent to the taxpayer, when available. The use of this label (or its precisely duplicated label information) is extremely important for the efficient, accurate, and economical processing of a taxpayer’s return. Labeled returns indicate that a taxpayer is an established filer and permits the IRS to automatically accelerate processing of those returns. This results in quicker refunds, less manual review by IRS functions, and greater accuracy in names, addresses, and postal deliveries. 3.6.4 Caution to Producers of Software Packages If you are producing a software package that generates name and address data onto the tax return, do not under any circumstances program either the IRS preprinted check digits or a practitioner derived name control to appear on any return prepared and filed with the IRS. 3.6.5 Programming to Print Forms Whenever applicable: •Use only the following label information format for single filers: JOHN Q. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000 •Use only the following information for joint filers: JOHN Q. PUBLIC MARY I. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000 2004–44 I.R.B.746November 1, 2004 Part 4 Additional Resources Section 4.1 – Guidance From Other Revenue Procedures 4.1.1 General Guidance for the substitute tax forms not covered in this revenue procedure and the revenue procedures that govern their use are as follows: •Revenue Procedure 2004-54, IRS Publication 1141,General Rules and Specifications for Substitute Forms W-2 and W-3. •Revenue Procedure 2004-58, IRS Publication 1179,General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W-2G and 1042-S. •Revenue Procedure 2004-63, IRS Publication 1187,Specifications for Filing Forms 1042S, Foreign Person’s U.S. Source Income Subject to Withholding, Electronically or Magneti- cally. •Revenue Procedure 2004-50, IRS Publication 1220,Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically or Magnetically. •Revenue Procedure 2003-31, IRS Publication 1223,General Rules and Specifications for Substitute Forms W-2c and W-3c. Section 4.2 – Ordering Publications 4.2.1 Sources of Publications The publications listed below are available either on the IRS website or may be ordered by calling 1-800-TAX-FORM (1-800-829-3676). Identify the requested document by IRS publi- cation number: •Publication 1141, the revenue procedure on specifications for private printing of Forms W-2 and W-3. •Publication 1167, the revenue procedure on substitute printed, computer-prepared, and computer-generated tax forms and schedules. •Publication 1179, the revenueprocedure on paper substituteinformation returns (Forms 1096, 1098, 1099, 5498, W-2G and 1042-S). •Publication 1220, the revenue procedure on electronic or magnetic reporting for informa- tion returns (Forms 1098, 1099 series, 5498, and W-2G). •Publication 1223, the revenue procedure on substitute Forms W-2c and W-3c. •Publication 1239,Specifications for Filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, Magnetically/Electronically. •Publication 1245, electronic and magnetic reporting for Forms W-4. •Publication 1345,Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns. (This is an annual publication; tax year is subject to change). •Publication 1345-A,Filing Season Supplement For Authorized IRS e-file Providers.This publication, printed in the late fall, supplements Publication 1345. November 1, 20047472004–44 I.R.B. 4.2.2 Where To Order If you are mailing your order, the address to use is determined by your location. IF you live in the...THEN mail your order to... Western United StatesWestern Area Distribution Center Rancho Cordova, CA 95743-0001 Central United StatesCentral Area Distribution Center P.O. Box 8903 Bloomington, IL 61702-8903 Eastern United States or a foreign country Eastern Area Distribution Center P.O. Box 85074 Richmond, VA 23261-5074 Section 4.3 – Electronic Tax Products 4.3.1 The Internet Copies of tax forms with instructions, publications, and other tax-related materials may be obtained via the Internet atw ww.irs.gov. 4.3.2 Tax Fax The most frequently requested tax forms, instructions, and other information are available through IRS Tax Fax at 703-368-9694. Call from your fax machine and follow the voice prompts. Your request will be transmitted directly back to you. Each call is limited to re- questing three items. Users pay the telephone line charges. 4.3.3 Official Forms Release Schedule The IRS website provides an Official Forms Release Schedule for the official forms released for use by taxpayers. The schedule has three parts: •Anticipated print dates of annual returns, •Anticipated print dates of quarterly returns, and •Last revision dates for continuous-use only forms. Thesiteaddressisw ww.irs.gov/formspubs/article/0,,id=103641,00.html. The site will be updated weekly during peak printing periodsand as necessary at other times. The planned dates are subject to change. Section 4.4 – Federal Tax Forms on CD-ROM 4.4.1 Information About Federal Tax Forms CD-ROM The CD-ROM contains over 3,000 tax forms and publications for small businesses, return preparers, and others who frequently need current or prior year tax products. Most current tax forms on the CD-ROM may be filled in electronically, then printed out for submission and saved for recordkeeping. Other products on the CD-ROM include the Internal Revenue Bulletins, Tax Supplements, and Internet resources for the tax professional with links to the World Wide Web. All necessary software to view the files mustbe installed from the CD-ROM. Software for Adobe Acrobat Reader is included on the disk. The software will run under Windows 95/98/NT and Macintosh System 7.5 and later versions ofthese programs. All products are presented in 2004–44 I.R.B.748November 1, 2004 Adobe’s Portable Document Format (PDF). In addition, tax publications are provided in the Hyper Text Markup Language (HTML). 4.4.2 System Requirements and How To Order the Federal Tax Forms CD-ROM For system requirements, contact the National Technical Information Service (NTIS) help desk at 703-487-4608. Prices are subject to change. The cost of the CD if purchased via the Internet ath ttp://www .irs.gov/cdordersfrom NTIS, is $22 (with no handling fee). If purchased using the following methods,the cost for each CD is $22 (plus a $5 handling fee). These methods are: •By phone – 1-877-CDFORMS (1-877-233-6767) •By fax – 703-605-6900 •By mail using the order form contained in IRS Publication 1045 (Tax Professionals Program) •By mail to: National Technical Information Service 5285 Port Royal Road Springfield, VA 22161 Part 5 Requirements for Specific Tax Returns Section 5.1 – Tax Returns (Form 1040, 1040A, 1120, etc.) 5.1.1 Acceptable Forms Tax forms (such as Forms 1040, 1040A, and 1120) require a signature and establish tax liability. Computer generated versions areacceptable under the following conditions: •These substitute forms must be printed on plain white paper. •Substitute forms must conform to the physical layout of the corresponding IRS form al- though the typeface may differ. The text should match the text on the officially published form as closely as possible. Condensed textand abbreviations will be considered on a case-by-case basis. Caution.All jurat (perjury statements) must be reproduced verbatim. No text can be added, deleted, or changed in meaning. •Various computer graphic print media such as laser printing, inkjet printing, etc., may be used to produce the substitute forms. •The substitute form must be the same number of pages and contain the same line text as the official form. •All substitute forms must be submitted for approval prior to their original use. You do not need approval for a substitute form if its only change is the preprinted year and you had received a prior year approval letter. Exception.If the approval letter specifies a one time exception for your form, the next year’s form must be approved. 5.1.2 Prohibited Forms The following are prohibited: •Computer generated tax forms (for example, Form 1040, etc.) on lined or color barred paper. November 1, 20047492004–44 I.R.B. •Tax forms that differ from the official IRS forms in a manner that makes them not standard or unable to process. 5.1.3 Changes Permitted to Forms 1040 and 1040A Certain changes (listed in Sections 5.2 through 5.4) are permitted to the graphics of the form without prior approval, but these changes apply to only acceptable preprinted forms. Changes not requiring prior approval are good only for the annual filing period, which is the current tax year. Such changes are valid in subsequent years only if the official form does not change. 5.1.4 Other Changes Not Listed All changes not listed in Sections 5.2 through 5.4 require approval from the IRS before the form can be filed. Section 5.2 – Changes Permitted to Graphics (Forms 1040A and 1040) 5.2.1 Adjustments You may make minor vertical and horizontal spacing adjustments to allow for computer or word processing printing. This includes widening the amount columns or tax entry areas if the adjustments comply with other provisions stated in revenue procedures. No prior approval is needed for these changes. 5.2.2 Name and Address Area The horizontal rules and instructions within the name and address area may be removed and the entire area left blank. No line or instruction can remain in the area. However, the statement regarding use of the IRS label should be retained. The heavy ruled border (when present) that outlines the name, address area, and social security number must not be removed, relocated, expanded, or contracted. 5.2.3 Required Format When the name and address area is left blank, the following format must be used when printing the taxpayer’s name and address. Otherwise, unless the taxpayer’s preprinted label is affixed over the information entered in this area, the lines must be filled in as shown: •1st name line (35 characters maximum). •2nd name line (35 characters maximum). •In-care-of name line (35 characters maximum). •City, state (25 characters maximum), one blank character, & ZIP code. 5.2.4 Conventional Name and Address Data When there is no in-care-of name line, the name and address will consist of only three lines (singlefiler)orfourlines(jointfiler).Nameand address (joint filer) with no in-care-of name line: JOHN Z. JONES MARY I. JONES 1234 ANYWHERE ST., APT. 111 ANYTOWN, STATE 12321 2004–44 I.R.B.750November 1, 2004 5.2.5 Example of In-Care-Of Name Line Name and address (single filer) with in-care-of name line: JOHN Z. JONES C/O THOMAS A. JONES 4311 SOMEWHERE AVE. SAMETOWN, STATE 54345 5.2.6 SSN and Employer Identification Number (EIN) Area The vertical lines separating the format arrangement of the SSN/EIN may be removed. When the vertical lines are removed, the SSNand EIN formats must be 000-00-0000 or 00-0000000, respectively. 5.2.7 Cents Column •You may remove the vertical rule that separates the dollars from the cents. •All entries in the amount column should have a decimal point following the whole dollar amounts whether or not the vertical line that separates the dollars from the cents is present. •You may omit printing the cents, but all amounts entered on the form must follow a con- sistent format. You are strongly urged to round off the figures to whole dollar amounts, following the official form instructions. •When several amounts are summed together, the total should be rounded off after addition (that is, individual amounts should not be rounded off for computation purposes). •When printing money amounts, you must use one of the following formats: (a) 0,000,000.; (b) 0,000,000.00 •When there is no entry for aline, leave the line blank. 5.2.8 “Paid Preparer’s Use Only” Area On all forms, the paid preparer’s information area may not be rearranged or relocated. You may add three lines and remove the horizontal rules in the preparer’s address area. Section 5.3 – Changes Permitted to Form 1040A Graphics 5.3.1 General No prior approval is needed for the followingchanges (for use with computer prepared forms only). 5.3.2 Line 4 of Form 1040A This line may be compressed horizontally (to allow for same line entry for the name of the qualifying child) by using the following caption: “Head of household; child’s name” (name field). 5.3.3 Other Lines Any line with text that takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references. 5.3.4 Page 2 of Form 1040A All lines must be present and numbered in the order shown on the official form. These lines mayalsobecompressed. November 1, 20047512004–44 I.R.B. 5.3.5 Color Screening It is not necessary to duplicate the color screening used on the official form. A substitute Form 1040A may be printed in black and white only with no color screening. 5.3.6 Other Changes Prohibited No other changes to the Form 1040A graphics are allowed without prior approval except for the removal of instructions and references to instructions. Section 5.4 – Changes Permitted to Form 1040 Graphics 5.4.1 General No prior approval is needed for the followingchanges (for use with computer prepared forms only). Specific line numbers in the following headings may have changed due to tax law changes. 5.4.2 Line 4 of Form 1040 This line may be compressed horizontally (to allow for a larger entry area for the name of the qualifying child) by using the following caption: “Head of household; child’s name” (name field). 5.4.3 Line 6c of Form 1040 The vertical lines separatingcolumns (1) through (4) may be removed. The captions may be shortened to allow a one line caption for each column. 5.4.4 Other Lines Any other line with text that takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references. 5.4.5 Line 21 – Other Income The fill-in portion of this line may be expanded vertically to three lines. The amount entry box must remain a single entry. 5.4.6 Line 43 of Form 1040–Tax You may change the line caption to read “Tax” and computer print the words “Total includes tax from” and either “Form(s) 8814” or “Form 4972.” If both forms are used, print both form numbers. This specific line number may have changed. 5.4.7 Line 54 of Form 1040 You may change the caption to read: “Other credits from Form” and computer print only the form(s) that apply. 5.4.8 Color Screening It is not necessary to duplicate the color screening used on the official form. A substitute Form 1040 may be printed in black and white only with no color screening. 2004–44 I.R.B.752November 1, 2004 5.4.9 Other Changes Prohibited No other changes to the Form 1040 graphics arepermitted without prior approval except for the removal of instructions and references to instructions. Part 6 Format and Content of Substitute Returns Section 6.1 – Acceptable Formats for Substitute Forms and Schedules 6.1.1 Exhibits and Use of Acceptable Formats Exhibits of acceptable formats for the schedules (A and B) usually attached to the Form 1040 and Form 2106-EZ are shown in the exhibits section of this revenue procedure. •If your computer generated forms appear exactly like the exhibits, no prior authorization is needed. •You may computer generate forms not shown here, but you must design them by following the manner and style of those in the exhibits section. •Take care to observe other requirements and conditions in this revenue procedure. The IRS encourages the submission of all proposed forms covered by this revenue procedure. 6.1.2 Instructions The format of each substitute form or schedule must follow the format of the official form or schedule as to item captions, line references, line numbers, sequence, form arrangement and format, etc. Basically, try to make the form look like the official one, with readability and consistency being primary factors. You may use periods and/or other similar special characters to separate the various parts and sections of the form. Do not use alpha or numeric characters for these purposes. With the exceptions described in Section 6.1.3, all line numbers and items must be printed even though an amount is not entered on the line. 6.1.3 Line Numbers When a line on an official form is designated by a number or a letter, that designation (ref- erence code) must be used on a substitute form. The reference code must be printed to the left of the text of each line and immediately preceding the data entry field, even if no reference code precedes the data entry field on the officialform. If an entry field contains multiple lines and shows the line references once on the left and right side of the form, use the same number of line references on the substitute form. In addition, the reference code that is immediately before the data field must either be fol- lowed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or the right parenthesis and the first digit of the data field. (See example below.) 6.1.4 Decimal Points A decimal point (that is, a period) should be used for each money amount regardless of whether the amount is reported in dollars and cents or in whole dollars, or whether or not the vertical line that separates the dollars from the cents is present. The decimal points must be vertically aligned when possible. November 1, 20047532004–44 I.R.B. Example: 5 STATE & LOCAL INC. TAXES...............5. 495.00 6 REAL ESTATE TAXES............................6. 7 PERSONAL PROPERTY TAXES............7. 198.00 or 5 STATE & LOCAL INC. TAXES...............(5) 495.00 6 REAL ESTATE TAXES.............................(6) 7 PERSONAL PROPERTY TAXES.............(7) 198.00 6.1.5 Multi-Page Forms When submitting a multi-page form, send allits pages in the same package. If you are not producing certain pages, please note that in your cover letter. Section 6.2 – Additional Instructions for All Forms 6.2.1 Use of Your Own Internal Control Numbers and Identifying Symbols You may show the computer prepared internal control numbers and identifying symbols on the substitute if using such numbers or symbols is acceptable to the taxpayer and the taxpayer’s representative. Such information must not be printed in the top 1 /2inch clear area of any form or schedule requiring a signature. Except for the actual tax return form (Forms 1040, 1120, 940, 941, etc.), you may print in the left vertical and bottom left margins. The bottom left margin you may use extends 3 1 /2inches from the left edge of the form. 6.2.2 Descriptions for Captions, Lines, etc. Descriptions for captions, lines, etc., appearing on the substitute forms may be limited to one print line by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line, or item. 6.2.3 Determining Final Totals Explanatory detail and/or intermediate calculations for determining final line totals may be included on the substitute. We prefer that such calculations be submitted in the form of a supporting statement. If intermediate calculations are included on the substitute, the line on which they appear may not be numbered or lettered. Intermediate calculations may not be printed in the right column. This column is reserved only for official numbered and lettered lines that correspond to the ones on the official form. Generally, you may choose the format for intermediate calculations or subtotalson supporting statements to be submitted. 6.2.4 Instructional Text on the Official Form Text on the official form, which is solely instructional (for example, “Attach this schedule to Form 1040,” “See instructions,” etc.), may generally be omitted from the substitute form. 6.2.5 Mixing Forms ontheSamePageProhibited You may not show more than one form or schedule on the same printout page. Both sides of the paper may be printed for multi-page official forms, butit is unacceptable to intermix single page schedules of forms except for Schedules A and B (Form 1040), which are printed back to back by the IRS. 2004–44 I.R.B.754November 1, 2004 For instance, Schedule E can be printed on both sides of the paper because the official form is multi-page, with page 2 continued on the back. However, do not print Schedule E on the front page and Schedule SE on the back, or Schedule A on the front and Form 8615 on the back, etc. Both pages of a substitute form must match the official form. The back page may be left blank if the official form contains only the instructions. 6.2.6 Identifying Substitutes Identify all computer prepared substitutes clearly. Print the form designation 1 /2inch from the top margin and 1 1 /2inches from the left margin. Print thetitle centered on the first line of print. Print the taxable year and, where applicable, the sequence number on the same line 1 /2 inch to 1 inch from the right margin. Include the taxpayer’s name and SSN on all forms and attachments. Also, print the OMB number as reflected on the official form. 6.2.7 Negative Amounts Negative (or loss) amount entries should be enclosed in brackets or parentheses or include a minus sign. This assists in accurate computation and input of form data. The IRS pre-prints parentheses in negative data fields on many official forms. These parentheses should be re- tained or inserted on affected substitute forms. Part 7 Miscellaneous Forms and Programs Section 7.1 – Specifications for Substitute Schedules K-1 7.1.1 Requirements for Schedules K-1 That Accompany Forms 1041, 1065, 1065-B, and 1120S Note.The formats for Schedules K-1 of Forms 1065 and 1120S have significantly changed for 2004. Because Publication 1167 is printed before the forms become finalized, draft copies are provided in the exhibits (see Exhibits D, E, and F). Before releasing their substitute forms, software vendors are responsible for making any subsequent changes that have been made to the final official IRS forms after the draft forms have been posted. Because of significant changes to the 2004 Schedules K-1 for Forms 1065 and 1120S and to improve processing, prior approval is now required for substitute Schedules K-1 that ac- company Form 1041 (for estates and trusts), Form 1065 (for partnerships), Form 1065-B (for electing large partnerships), or Form 1120S (for S corporations). Substitute Schedules K-1 should be as close as possible to exact replicas of copies of the official IRS schedules and fol- low the same process for submitting other substitute forms and schedules. If you feel you will suffer a financial hardship in producing the 2004 Schedules K-1 of Forms 1065 and 1120S because of the significant changes to the form and format, the IRS will consider allowing deviations from the official form for tax year 2004 only. However, you must include all information on the form. Only deviations in placement and format will be considered. You may prepare a justification and submit it to the IRS at* taxforms@irs.gov with “Attn: Substitute Forms” on the subject line or: Internal Revenue Service Attn: Substitute Forms Program SE:W:CAR:MP:T:T:SP 1111 Constitution Avenue, NW Room 6406 Washington, D.C. 20224 November 1, 20047552004–44 I.R.B. Schedules K-1 that accompany Forms 1041, 1065, 1065-B, or 1120S must meet all specifi- cations. The specifications include, but are not limited to, the following requirements: •You will no longer be able to produce Schedules K-1 that contain only those lines or boxes that taxpayers are required to use. All lines must be included. •The words “*See attached statement for additional information.” must be preprinted in the lower right hand side on Schedules K-1 of Forms 1065 and 1120S. •All K-1s that are filed with the IRS should be printed on standard 8.5” x 11” paper (the international standard (A4) of 8.27” x 11.69” may be substituted). •Each recipient’s information must be on a separate sheet of paper. Therefore, you must separate all continuously printed substitutes, by recipient, before filing with the IRS. •No carbon copies or pressure-sensitive copies will be accepted. •The Schedule K-1 must contain the name, address, and SSN or EIN of both the entity (es- tate, trust, partnership, or S Corporation) and the recipient (beneficiary, partner, or share- holder). •The Schedule K-1 must contain the tax year, the OMB number, the schedule number (K-1), the related form number (1041, 1065, 1065-B, or 1120S), and the official schedule name in substantially the same position and format as shown on the official IRS schedule. •The Schedule K-1 must contain all the line items as shown on the official form, except for the instructions, if any are printed on the back of the official Schedule K-1. •The line items or boxes must be in the same order and arrangement as those on the official form. •The amount of each recipient’s share of eachitem must be shown. Furnishing a total amount of each item and a percentage (or decimal equivalent) to be applied to such to- tal amount by the recipient does not satisfy the law and the specifications of this revenue procedure. •State or local tax-related information maynot be included on the Schedules K-1 filed with the IRS. •The entity may have to pay a penalty if substitute Schedules K-1 are filed that do not con- form to specifications. •Additionally, the IRS may consider the Schedules K-1 that do not conform to specifications as not being able to process and may return Forms 1041, 1065, 1065-B, or 1120S to the entity to be filed correctly. Schedules K-1 that are 2-D bar-coded will continue to require prior approval from the IRS (see Sections 7.1.3 through 7.1.5). 7.1.2 Special Requirements for Recipient Copies of Schedules K-1 Standardization for reporting informationis required for recipient copies of substitute Schedules K-1 of Forms 1041, 1065, 1065-B, and 1120S. Uniform visual standards are provided to increase compliance by allowing recipients and practitioners to more easily recognize a substitute Schedule K-1. The entity must furnish to each recipient a copy of Schedule K-1 that meets the following requirements: •You will no longer be able to produce Schedules K-1 that contain only those lines or boxes that taxpayers are required to use. All lines must be included. •Both pages 1 and 2 of Schedules K-1 of Forms 1065 and 1120S must be provided to each recipient. •The words “*See attached statement for additional information.” must be preprinted in the lower right hand side on Schedules K-1 of Forms 1065 and 1120S. •The Schedule K-1 must contain the name, address, and SSN or EIN of both the entity and recipient. •The Schedule K-1 must contain the tax year, the OMB number, the schedule number (K-1), the related form number (1041, 1065, 1065-B, or 1120S), and the official schedule name in substantially the same position and format as shown on the official IRS schedule. •All applicable amounts and information required to be reported must be titled and numbered in the same manner as shown on the officialIRS schedule. The line items or boxes must 2004–44 I.R.B.756November 1, 2004 be in the same order and arrangement and must be numbered like those on the official IRS schedule. •The Schedule K-1 must contain all items required for use by the recipient. The instructions to the schedule must identify the line orbox number and code, if any, for each item as shown in the official IRS schedule. •The amount of each recipient’s share of eachitem must be shown. Furnishing a total amount of each line item and a percentage (or decimal equivalent) to be applied to such total amount by the recipient does not satisfy the law and the specifications of this revenue procedure. •Instructions to the recipient that are substantially similar to those on or accompanying the official IRS schedule must be provided to aid in the proper reporting of the items on the recipient’s income tax return. Where items are not reported to a recipient because they do not apply, the related instructions may be omitted. •The quality of the ink or other material used to generate recipients’ schedules must produce clearly legible documents. In general, black chemical transfer inks are preferred. •In order to assure uniformity of substitute Schedules K-1, the paper size should be standard 8.5” x 11” (the international standard (A4) of 8.27” x 11.69” may be substituted.) •The paper weight, paper color, font type, font size, font color, and page layout must be such that the average recipient can easily decipher the information on each page. •State or local tax-related information may be included on recipient copies of substitute Schedules K-1. All non-tax-related information should be separated from the tax informa- tion on the substitute schedule to avoid confusion for the recipient. •The legend “Important Tax Return Document Enclosed” must appear in a bold and con- spicuous manner on the outside of the envelope that contains the substitute recipient copy of Schedule K-1. •The entity may have to pay a penalty if a substitute Schedule K-1 furnished to any recipient does not conform to the specifications of this revenue procedure and results in impeding processing. 7.1.3 Requirements for Schedules K-1 with Two-Dimensional (2-D) Bar Codes In an effort to reduce the burden of manually transcribing tax documents, improve qual- ity, and increase government efficiency, theIRS is pleased to providespecifications for 2-D bar-coded substitute Schedules K-1 for Forms 1041, 1065, and 1120S. The IRS encourages voluntary participation in adding 2-D barcoding. See Exhibits D, E, and F for examples of draft bar-coded Schedules K-1. Note.If software vendors do not want to produce bar-coded Schedules K-1, they may produce the official IRS Schedules K-1 but cannot use the expedited process for approving bar-coded K-1’s and their parent returns as outlined in Section 7.1.5. In addition to the above requirements, the bar-coded Schedules K-1 must meet the following specifications. •The bar code should print in the space labeled “For IRS Use Only” on each Schedule K-1. The entire bar code must print within the “For IRS Use Only” box surrounded by a white space of at least 1 /4-inch. •Bar codes will print in PDF 417 format. •The bar codes must always be in the specifiedformat with every field represented by at least a field delimiter (carriage return). Leaving out a field in a bar code will cause every subsequent field to be misread. 7.1.4 Approval Process for Bar-Coded Schedules K-1 Prior to releasing commercially available tax software that creates bar-coded Schedules K-1, the printed schedule and the bar code must both be tested. Bar code testing must be done using the final official IRS Schedule K-1. Bar code approval requests must be resubmitted for any subsequent changes to the official IRS form that would affect the bar-code. Below are instructions and a sequence of events that will comprise the testing process. November 1, 20047572004–44 I.R.B. •The IRS has released the final Schedule K-1 bar-code specifications by publishing them on the IRS.gov web site (seeh ttp://www.irs.gov/efile/article/0,,id=113408,00.html) •The IRS will publish a set of test documents that will be used to test the ability of tax preparation software to create bar codes in the correct format. •Software developers will submit two identical copies of the test documents – one to the IRS and one to a contracted testing vendor. •The IRS will use one set to ensure the printed schedules comply withstandard substitute forms specifications. •If the printed forms fail to meet the substitute form criteria, the IRS will inform the software developer of the reason for noncompliance. •The software developer must resubmit the Schedule(s) K-1 until they pass the substitute forms criteria. •The testing vendor will review the bar codes to ensure they meet the published bar-code specifications. •If the bar code(s) does not meet published specifications, the testing vendor will contact the software developer directly informing them of the reason for noncompliance. •Software developers must submit new bar-coded schedules until they pass the bar-code test. •When the bar code passes, the testing vendor will inform the IRS that the developer has passed the bar-code test and the IRS will issue an overall approval for both the substitute form and the bar code. •After receiving this consolidated response, the software vendor is free to release software for tax preparation as long as any subsequent revisions to the schedules do not change the fields. •Find the mailing address for the testing vendor below. Separate and simultaneous mailings to the IRS and the vendor will reduce testing time. 7.1.5 Procedures for Reducing Testing Time In order to help provide incentives to the software development community to participate in the Schedule K-1 2-D project, the IRS has committed to expediting the testing of bar-coded Schedules K-1 and their associated parent returns. To receive this expedited service, closely follow the bullets below. •Mail the parent returns (Forms 1065, 1120S,1041) and associated bar-coded Schedule(s) K-1 to the appropriate address below in a separate package from all other approval requests. Internal Revenue Service Attn: Bar-Coded K-1 SE:W:CAR:MP:T:T:SP 1111 Constitution Avenue, NW Room 6406 Washington, D.C. 20224 Northrop Grumman Information Tech Attn: Bill Philpot, Product Assurance Manager 1800 Alexander Bell Drive Suite 300 Reston, VA 20191 Phone: (703) 453-1200 •While the IRS can expedite bar-coded Schedules K-1 and their associated parent returns, it cannot expedite the approvalof non-associated tax returns. •Mail one copy of the parent form(s) and Schedule(s) K-1 to the IRS and another copy to the testing vendor. •Include multiple email and phone contact points in the packages. 2004–44 I.R.B.758November 1, 2004 Section 7.2 – Procedures for Printing IRS Envelopes 7.2.1 Procedures for Printing IRS Envelopes Organizations are permitted to produce substitute tax return envelopes. Use of substitute return envelopes that comply with the requirements set forth in this section will assist in de- livery of mail by the U.S. Postal Service and facilitate internal sorting at the Internal Revenue Service Centers. Use the following five-digit ZIP codes when mailing returns to the IRS Service Centers: Service CenterZIP Code Atlanta, GA39901 Kansas City, MO64999 Austin, TX73301 Philadelphia, PA19255 Memphis, TN37501 Andover, MA05501 Cincinnati, OH45999 Ogden, UT84201 Fresno, CA93888 7.2.2 Sorting Returns by Form Type Sorting returns by form type is accomplished bythe preprinted bar codes on return envelopes included in each specific type of form or package mailed to the taxpayers. The 32 bit bar code on the left of the address on each envelope identifies the type of form the taxpayer is filing, and it assists in consolidating like returns for processing. Failure to use the envelopes furnished by the IRS results in additional processing time and effort, and possibly delays the timely deposit of funds, processing of returns,and issuance of refund checks. 7.2.3 ZIP+4 or 9-Digit ZIP Codes The IRS will not furnish or sell bulk quantities of preprinted tax return envelopes to tax- payers or tax practitioners. A suitable alternative has been developed that will accommodate the sorting needs of both the IRS and the United States Postal Service (USPS). The alternative is based on the use of ZIP + 4, or 9-digit ZIP codes for mailing various types of tax returns to the IRS Service Centers. The IRS uses the last four digits to identify and sort the various form types into separate groups for processing. Thelist of 4-digit extensions with the related form designations is provided below. November 1, 20047592004–44 I.R.B. ZIP+FOURPackage XXXXX-00021040 XXXXX-0005941 XXXXX-0006940 XXXXX-0008943 XXXXX-00111065 XXXXX-00121120 XXXXX-00131120S XXXXX-00141040EZ XXXXX-00151040A XXXXX-0027990 XXXXX-00312290 7.2.4 Guidelines for Having Envelopes Preprinted You may use the preparer’s company names, addresses, and logos as long as you do not interfere with the clear areas. The government recommends that the envelope stocks have an average opacity of not less than 89 percent andcontain a minimum of 50 percent waste paper. Use of carbon based ink is essential for effective address and bar-code reading. Envelope construction can be of side seam or diagonal seam design. The government recommends that the size of the envelope should be 5 3 /4inches by 9 inches. Continuous pin-fed construction is not desirable, but is permissible, if the glued edge is at the top. This requirement is firm because mail opening equipment is designed to open the bottom edge of each envelope. 7.2.5 Envelopes/ZIP Codes The above procedures or guidelines are written for the user having envelopes preprinted. Many practitioners may not wish to have large quantities of envelopes with differing ZIP codes/form designations preprinted due to low volume, warehousing, waste, etc. In this case, the practitioner can type or machine print the addresses with the appropriate ZIP codes to ac- commodate sorting. If the requirements/guidelines outlined in this section cannot be met, then use only the appropriate five-digit service center ZIP code. Section 7.3 – Procedures for Substitute Forms 5471 and 5472 7.3.1 Forms 5471 and 5472 This section covers instructions for producing substitutes for: •Form 5471,Information Return of U.S. Persons With Respect to Certain Foreign Corpora- tions, and accompanying Schedules J, M, N, and O. •Form 5472,Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. 2004–44 I.R.B.760November 1, 2004 7.3.2 Paper and Computer Generated Substitutes Substitutes for Form 5471 and the accompanying Schedules J, M, N, and O, and Form 5472 that totally conform to the specifications contained in this procedure maybe privately printed, but must have prior approval and are subject to annual review from the IRS. 7.3.3 Where To Get the Official Forms Copies of the official Forms 5471 and 5472 for the reporting year may be obtained from most IRS offices. The IRS provides only cut sheets of these forms. 7.3.4 Quality Substitute Forms The IRS will accept quality substitute tax forms that are consistent with the official forms they represent and that do not have an adverse impact on processing. Therefore, only those substitute forms that conform to, and do not deviate from, the corresponding official forms are acceptable. 7.3.5 Computer Prepared Tax Forms If the substitute returns and schedules meet the guidelines in this revenue procedure, the IRS will (for filing purposes) accept computerprepared Forms 5471 and 5472 filled in by a computer, word processor, or similar automated equipment. The IRS will also accept a combi- nation of computer prepared/generated and filled-in information. They may be filed separately or attached to individual or business income tax returns. 7.3.6 Format Arrangement The specifications for Forms 5471 and 5472 are as follows: •The substitute must follow the design of the official form as to format, arrangement, item caption, line numbers, line references, and sequence. It must be an exact textual and graphic mirror image of the official form. •The filer must use one of the official ten character amount formats. All entries in the amount column should have a decimal point following the whole dollar amounts whether or not the vertical line that separates the dollars from the cents is present. It must follow a consistent format. •The reference code must be printed to the left of the corresponding captioned line and also immediately preceding the data entry field even if there is no reference code preceding the data entry field on the official form. The reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or theright parenthesis and the first digit of the data field. •The size of the page must be the same as the official form (8 1 /2′′x11′′). •The acceptable type is Helvetica. •The spacing of the type must be 6 lines per inch vertically, 10 or 12 print characters per inch horizontally. •A 1 /4inch to 1 /2inch margin must be maintained across the top, bottom, and both sides. •The substitute form must be the same number of pages as the official one. •The preprinted parentheses in the money fields should be retained. •The filer must completely fill in all the specified numbers or referenced lines as they appear on the official form (not just totals) before attaching any supporting statement. •Supporting statements are never to be used until the required official form they support are completely filled in. A blank or incomplete form that refers to a supporting statement, in lieu of completing a taxreturn, is unacceptable. •Descriptions for captions, lines, etc., appearing in the substitute forms may be limited to one print line by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line, or item. November 1, 20047612004–44 I.R.B. •Text prescribed for the official form, which issolely instructional (for example , “Attach this schedule to Form 1120,” “See instructions”, etc.) may be omitted from the form. 7.3.7 Filing Instructions Instructions for filing substitute forms are the same as for filing official forms. Part 8 Alternative Methods of Filing Section 8.1 – Forms for Electronically Filed Returns 8.1.1 Electronic Filing Program Electronic filing is a method by which qualified filers transmit tax return information di- rectly to an IRS Service Center over telephonelines in the format of the official IRS forms. The IRS accepts both refund and balance due individual tax returns that are filed electronically. 8.1.2 Applying for the Electronic Filing Program Anyone wishing to participate in the IRSe-fileprogram for individual income tax returns must submit a Form 8633, Application to Participate in the IRSe-fileProgram. 8.1.3 Mailing Instructions IF Form 8633 is used for...THEN mail it to... Individual income taxes (regular mail) Internal Revenue Service Andover Submission Processing Center Attn: EFU Acceptance - Testing Stop 983 P.O. Box 4099 Woburn, MA 01888-4099 Individual income taxes (overnight mail) Internal Revenue Service Andover Submission Processing Center Attn: EFU Acceptance - Testing Stop 983 310 Lowell Street Andover, MA 05501-0001 Forms 940, 941, and 1065Internal Revenue Service Andover Submission Processing Center Attn: EFU Acceptance - Testing Stop 983 P.O. Box 4099 Woburn, MA 01888-4099 Forms 1041Internal Revenue Service Andover Submission Processing Center Attn: EFU Acceptance - Testing Stop 983 P.O. Box 4099 Woburn, MA 01888-4099 2004–44 I.R.B.762November 1, 2004 8.1.4 Obtaining the Taxpayer Signature Form 8453, U.S. Individual Income Tax Declaration for an IRSe-fileReturn, is the sig- nature document for an electronically filed 1040, 1040A, or 1040EZ return not filed with an electronic signature. Form 8453, which serves as a transmittal for associated nonelectronic (paper) documents such as Forms 3115, 5713, 8283, 8332, and 8609, is a one page form and can only be approved through the Substitute Forms Program in that format. Forms 8453-OL and 8453-NR serve the same purpose for taxpayers filing through online services and Form 1040-NR filers, respectively. For specific information about electronic filing, refer to Publica- tion 1345,Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns. 8.1.5 Guidelines for Preparing Substitute Forms in the Electronic Filing Program A participant in the electronic filing program, who wants to develop a substitute form should follow the guidelines throughout this publication and send a sample form for approval to the Substitute Forms Unit at the address in Part 1. If you do not prepare Substitute Form 8453 using a font in which all IRS wording fitson a single page, the form will not be accepted. Note.Use of unapproved forms could result in suspension of the participant from the elec- tronic filing program. Section 8.2 – Effect on Other Documents 8.2.1 Effect on Other Documents This revenue procedure supersedes Revenue Procedure 2003-73, 2003-39 I.R.B. 647. November 1, 20047632004–44 I.R.B. 2004–44 I.R.B.764November 1, 2004 November 1, 20047652004–44 I.R.B. 2004–44 I.R.B.766November 1, 2004 November 1, 20047672004–44 I.R.B. 2004–44 I.R.B.768November 1, 2004 November 1, 20047692004–44 I.R.B. 2004–44 I.R.B.770November 1, 2004 November 1, 20047712004–44 I.R.B. 2004–44 I.R.B.772November 1, 2004 November 1, 20047732004–44 I.R.B. 2004–44 I.R.B.774November 1, 2004 November 1, 20047752004–44 I.R.B. Exhibit G Checklist of IRS Substitute Forms Submitted on......... 20: Company:.............................................. Contact:................................................ Phone:................................................. Fax:.................................................... Source Code:........................................... Form Number Approved With Corrections Must Be Resubmitted ApprovedComments Authorized Name: Title: Reviewer’s Name: Telephone: Date: 2004–44 I.R.B.776November 1, 2004 Exhibit H – List of Forms Referred to in the Revenue Procedure FormTitleSection 706United States Estate (and Generation-Skipping Transfer) Tax Return2.1 720Quarterly Federal Excise Tax Return2.5 940-EZEmployer’s Annual Federal Unemployment (FUTA) Tax Return2.3 941Employer’s Quarterly Federal Tax Return2.3; 3.4; 6.2; 7.2 943Employer’s Annual Tax Return for Agricultural Employees2.3 945Annual Return of Withheld Federal Income Tax2.3 1040U.S. Individual Income Tax Return2.3; 2.4; 2.5; 3.1; 3.2; 3.4; 5.1; 5.2; 5.4; 6.1; 6.2; 7.2; 8.1 1040-ESEstimated Tax for Individuals1.1; 2.3; 3.2; 4.2 1040AU.S. Individual Income Tax Return2.1; 2.4; 3.1; 3.2; 3.4; 5.1; 5.2; 5.3; 7.2; 8.1 1040EZIncome Tax Return for Single and Joint Filers with No Dependents2.4; 3.1; 3.4; 7.2; 8.1 1040-NRU.S. Nonresident Alien Income Tax Return8.1 1040-VForm 1040-V Payment Voucher2.3 1041U.S. Income Tax Return for Estates and Trusts2.5; 3.1; 7.1; 8.1 1041-ESEstimated Income Tax for Estates and Trusts2.3; 3.2 1042-SForeign Person’s U.S. Source Income Subject to Withholding1.2; 4.1; 4.2 1065U.S. Return of Partnership Income2.5; 3.1; 7.1; 8.1 1065-BU.S. Return of Income for Electing Large Partnerships7.1 1096Annual Summary and Transmittal of U.S. Information Returns1.1; 1.2; 4.1; 4.2 1098Mortgage Interest Statement1.1; 1.2; 4.1; 4.2 1099Series1.1; 1.2; 4.1; 4.2 1120U.S. Corporation Income Tax Return2.5; 3.1; 3.4; 5.1; 6.2; 7.2; 7.3 1120-SU.S. Income Tax Return for an S Corporation3.1; 7.1; 7.2 2106-EZUnreimbursed Employee Business Expenses6.1 2290Heavy Highway Vehicle Use Tax Return2.3; 7.2 3468Investment Credit2.5 4136Credit for Federal Tax Paid on Fuels2.5 4972Tax on Lump-Sum Distributions5.4 5471Information Return of U.S. Persons With Respect to Certain Foreign Corporations7.3 5472Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign CorporationEngagedinaU.S.TradeorBusiness 7.3 5498IRA Contribution Information1.1; 1.2; 4.1; 4.2 5500Annual Return/Report of Employee Benefit Plan1.1; 1.2 5500-EZAnnual Return of One-Participant (Owners and Their Spouses) Retirement Plan1.1; 1.2 8453U.S. Individual Income Tax Declaration for an IRS e-file Return8.1 8453-OLU.S. Individual Income Tax Declaration for an IRS e-file Online Return8.1 November 1, 20047772004–44 I.R.B. FormTitleSection 8633Application to Participate in the IRS e-file Program8.1 8814Parents’ Election To Report Child’s Interest and Dividends5.4 W-2Wage and Tax Statement1.1; 1.2; 4.1; 4.2 W-2cCorrected Wage and Tax Statement1.1; 1.2; 4.1; 4.2 W-2GCertain Gambling Winnings1.1; 1.2; 4.1; 4.2 W-3Transmittal of Wage and Tax Statements1.1; 1.2; 4.1; 4.2 W-3cTransmittal of Corrected Wage and Tax Statements1.1; 1.2; 4.1; 4.2 W-4Employee’s WithholdingAllowance Certificate4.2 2004–44 I.R.B.778November 1, 2004 Part IV. Items of General Interest Foundations Status of Certain Organizations Announcement 2004–88 The following organizations have failed to establish or have been unable to main- tain their status as public charities or as op- erating foundations. Accordingly, grantors and contributors may not, after this date, rely on previous rulings or designations in the Cumulative List of Organizations (Publication 78), or on the presumption arising from the filing of notices under sec- tion 508(b) of the Code. This listing does notindicate that the organizations have lost their status as organizations described in section 501(c)(3), eligible to receive de- ductible contributions. Former Public Charities.The follow- ing organizations (which have been treated as organizations thatare not private foun- dations described in section 509(a) of the Code) are now classified as private foun- dations: 3rd Step Family Home, Athens, GA 5th Regiment Tennessee Infantry Company E Reactivated, Inc., Providence, KY 50-Plus Foundation, McLean, VA A A I M, Inc., Rockmart, GA ABBA Ministries, North Augusta, SC Abiding Life in Christ Ministries, Inc., Iverness, FL Adventure Foundation, Norfolk, VA AFC Child Enrichment Center, Inc., Atlanta, GA African-American Culture Center of Rowan County, East Spencer, NC Agape Ministries Unlimited, Inc., Warner Robins, GA Aids Resource Council, Inc., Rome, GA Aids Walk San Juan, Inc., Carolina, PR Alabama Association of Assessing Officials, Cullman, AL Alafia Village, Inc., Highland City, FL Alcance Juvenil, Inc., San Antonio, TX Alliance for Modern Transit and Livable Communities, Inc., Tampa, FL Alternatives for Better Classrooms, Arlington, VA American Air Combat Museum, Greenville, TN American States Services, Inc., Vienna, VA Angels in Action, Springfield, VA Angels in the Sun, South Pasadena, FL Animal House Zoological Society, Inc., Moulton, AL Animal Welfare, Inc., Louisville, KY Anna R. King Community Development, Inc., Aventura, FL Apostolic Messianic Evangelist Network, Inc., Chesterfield, VA Arkansas Association of Partners in Education, Little Rock, AR Arkansas Radio Emergency Services, Little Rock, AR Arms of Agape, Inc., Tallahassee, FL Art Soup, Inc., Knoxville, TN Artsource, Inc., Lexington, SC Asian-American Association for Advancement, Inc., Duluth, GA Association Culturelle et Humanitaire Des Coti-Ferois, Inc., Miami, FL Association for Fair Housing, Santa Monica, CA B & H Community Book Center, Inc., Riviera Beach, FL Baptist Mission Center, Inc., Jacksonville, FL Barnabas Foundation, Inc., Smyrna, GA Begin Again, Inc., Atlanta, GA Being Self Sufficient Today, Dunn, NC B E S T, Inc., Pikeville, TN Better Life Foundation, Birmingham, AL Black Jade, Inc., Atlanta, GA Blackque Gyrlz, Inc., Orlando, FL Blessed Beginnings Learning Academy, Memphis, TN Blood N Fire of Athens, Watkinsville, GA Bowen Research and Training Institute, Inc., Palm Harbor, FL Brain Center, Inc., Chantilly, VA Brevard Emergency Amateur Radio Services, Inc., Cocoa Beach, FL Brotherhood Club of St. Augustine Florida, Inc., St. Augustine, FL Bur Boyd Memorial Scholarship, Inc., Bradenton, FL C & G Music Tours for Children, Inc., Nashville, TN California Research Institute for the Plumbing Heating & Piping Industry, Los Angeles, CA Call to Action South Florida, Inc., Miami, FL Calvary Community Corporation, Inc., North Lauderdale, FL Cancer SurvivorshipAlliance, Weston, FL Cannon County Dixie Youth Association, Inc., Woodbury, TN Capital City BMX Association, Raleigh, NC Care Facilitators International, Inc., West Des Moines, IA Caribbean Missions for Christ and World Outreach, Hohenwald, TN Caricature Carvers of America, Inc., Lake Charles, LA Carlos & Algeria Beracasa Foundation, Inc., Miami, FL Carolina Mudcats Foundation, Inc., Raleigh, NC Carolina-Virginia Reading Service, Incorporated, Roanoke Rapids, NC Catholic Lay Persons International, Inc., Coral Gables, FL Center for Aids Education and Senior Empowerment, Inc., Miami, FL Center for International Agricultural Development, Inc., Plantation, FL Central Mississippi Emmaus Community, Jackson, MS Certification Education & Research Foundation, Inc., Raleigh, NC Chandak International Charitable Foundation, Raleigh, NC Charlie Kubala Memorial Scholarship Trust, Sumter, SC Charlottesville Pride, Charlottesville, VA Children and Youth Behavioral Health Center, Inc., Buckhannon, WV Children to Children Foundation, Inc., Atlanta, GA Childrens Recovery Center, Inc., Conway, SC Childrens Touch Institute, Inc., Pompano Beach, FL Chippenham Place Youth Group, Richmond, VA Choctaw Baseball Diamond Club, Inc., Fort Walton Beach, FL Christ Fellowship Daycare, Incorporated, Memphis, TN Christian County Ralph Bell Crusade, Inc., Hopkinsville, KY Christian Oriented Education, Inc., Rockvale, TN Christian Safety, Inc., Decatur, GA Christian Womens Spiritual Fellowship, Inc., Nashville, TN Circulo Lirico De La Opera, Coral Gables, FL November 1, 20047792004–44 I.R.B. City-County Community Education Program, Waveland, MS Claudia M. Lee Golden Years Day Care Center, Columbia, SC Clearview Recovery Foundation, Inc., Daphne, AL Clothes Less Traveled Thrift Shop, Inc., Peachtree City, GA Cobb Training Institute, Inc., Marietta, GA Cole Youth Baseball, Inc., Nashville, TN Colombian American Coalition of Florida, Inc., Coral Gables, FL Columbia Mission Project, Inc., Tallahassee, FL Commonwealth Center for Continuing Education & Training, Tuskegee, AL Communion, Inc., Asheville, NC Community Alternative Services Agency, Inc., Port Richey, FL Community Blood Bank Center of St.Croix,Inc.,St.Croix,VI Community Housing Corporation of Broward, Plantation, FL Community Safety Net, Inc., Atlanta, GA Conquest of Paradise, Inc., Miami, FL Coral Reef Wrestling Club, Inc., Coral Gables, FL Coral Springs Parents Hoop Club, Inc., Coral Springs, FL Council for Human Development, Inc., Alexandria, VA Council for the Advancement of Minority Business International, Inc., Lake Park, FL Count the Cost, Inc., Decatur, GA Covenant Homes, Inc., Lexington, SC Craggy Mountain Line, Inc., Arden, NC Credit Education Services of America, Inc., Cary, NC Crossroads 2000, Inc., Lithonia, GA Damascus Music Ministries, Inc., Marietta, GA Dame-Marie An Movement, Inc., Miami, FL Daughters of the Covenant, Durham, NC David & Tina Skinner Ministries, Inc., Greenwood, IN DC Childrens Education Fund, Washington, DC Deborah Kelley Herndon Memorial Foundation, Northport, AL Debt Management Corporation, Orange Park, FL Deer Park Fire Department, Deer Park, CA Delaware Safe Kids, Inc., Dover, DE Devans World Foundation for Children With Special Needs, Inc., Fayetteville, NC Dinwiddie County Sports Club, Inc., Dinwiddie, VA Disability Awareness Foundation, Nashville, TN Discovery Camping, Inc., Lawrenceville, GA Disease Awareness Resources & Treatment Corporation, Miami Shores, FL DKG Enterprises, Inc., West Palm Beach, FL Domestic Violence Advisory Council, Brandon, MS Don Herrick Evangelistic Association, Cary, NC Dots Child Care Center, Inc., Thibodaux, LA Douglas County Food Bank, Douglasville, GA Dr. Beatriz Lopez-Van Beuren Internal Medicine Award Fund, Marathon, FL Drug Free America, Inc., Delray Beach, FL Dyno-Might Ministries, Inc., Nashville, TN Earlston Development Corporation, Atlanta, GA East Consortium, Charleston, SC Eastwood Neighbors Nashville, TN, Nashville, TN Essex Village Community Outreach Center, Inc., Richmond, VA Estero Bay Marine Laboratory, Inc., Ft. Myers, FL Eternal Change Ministries, Inc., Port Washington, NY Faith Defenders, Inc., Mt. Morris, PA Faith in Action Ministries, Inc., St. Thomas, VI Family Advocacy Foundation, Winston Salem, NC Family Entertainment Workshop, Inc., Tampa, FL Family Institution for the Homeless, Inc., Kissimmee, FL Fanues Foundation, Inc., Louisville, KY Fentress County Food Bank, Inc., Allardt, TN Fish-N-4-Kids, High Point, NC Flame Ministries, Inc., Sumner, WA Florida Crime Prevention Federation, Inc., Davie, FL Florida-Georgia K-9Search and Rescue Squad, Inc., Havana, FL Forward Steps, Inc., Jacksonville, FL Foster Parenting, Inc., Winter Park, FL Foundation for American Liberty, McLean, VA Foundation for Genetic Education & Counselling, Inc., Baltimore, MD Foundation for Osteopathic Research and Training, Inc., Manchester, NH F.R.E.E.,Madisonville,TN Friends of the Playground of Paris and Bourbon County, Inc., Paris, KY Fully Persuaded Ministries, Bowling Green, KY Gary Hash Ministries, Inc., Pulaski, VA General Alumni Association of Allen University, Inc., Columbia, SC George High Community Association, Inc., Atlanta, GA Georgia Childrens Food Services, Inc., Marietta, GA Georgia Golden Wings Track Club, Inc., Stone Mountain, GA Georgia Soccer Development Foundation, Inc., Atlanta, GA Georgia Training & Development Center, Albany, GA Getting Involved and Volunteering Efforts, Inc., Lexington, KY Gifts From the Garden, Alexandria, VA Global Elephant Organization, Inc., Gulf Breeze, FL Global Ministries, Inc., Fayetteville, GA Glynn Academy Alumni Association, Inc., Brunswick, GA Gods Refuge, Tampa, FL Good Shepherd Ministry, Inc., Lynchburg, VA Grand Farms of America, Inc., Warrenton, NC Grand Prep Limited, Riverdale, GA Grant Writing Assistance Program of Ellerbee, Ellerbee, NC Greater Memphis Child Care Service, Inc., Memphis, TN Greater Piedmont Aids Educational Team, Inc., Kannapolis, NC Greenbrier Land Conservation Trust, Inc., Lewisburg, WV Guardian Angel House, Inc., Malabar, FL Haitian Coalition of Central Florida, Inc., Orlando, FL Hampton Roads Sailing Center, Inc., Hampton, VA Haralson Arts Alliance, Inc., Bremen, GA Harmony at Home, Incorporated, Nashville, TN Harry T. & Harriette V. Moore Justice Center Committee, Inc., Melbourne, FL Harvey Foundation, Inc., Hiram, GA Health Alliances International, Incorporated, Richmond, VA 2004–44 I.R.B.780November 1, 2004 Heart of Georgia Walk to Emmaus, Inc., Warner Robbins, GA Helping Hands Child Advocacy, Incorporated, Mobile, AL Higher Hope Ministries, Inc., Pace, FL Holistic Alliance of Professional Practitioners, Gainesville, FL Holy Ghost Council 11484 Charity Fund, Issue, MD Homecoming, Inc., Atlanta, GA Homeless Emergency Love Project, Inc., Raleigh, NC Humane Society of Laurel County, Inc., London, KY In His Name Christian Ministries, Inc., Nashville, TN In His Name Ministry of Helps, Inc., St. Augustine, FL Indo-American Host Committee for 1996–Games, Inc., Lilburn, GA Inner City Acheivers Foundation, Atlanta, GA Inner City Fund, Inc., Tampa, FL Institute for Work and Learning, Hendersonville, TN Inter-Neighborhood Resident Association, Inc., Macon, GA Interface Network Group, Inc., Miami, FL International Adoption Foundation, Cedar Grove, NC International Bemisia Working Group, Orlando, FL International Evangelism Missions, Inc., Rocky Mount, NC J & H South Foundation, Inc., Atlanta, GA Journey Institute, Winston Salem, NC Just for Children, Inc., Atlanta, GA Kids Can Too, Inc., Stone Mountain, GA Kids Connection Development, Inc., Decatur, GA Kids Film Festival of Virginia, Inc., Richmond, VA Kitchens Evangelistic Ministries, Inc., Dalton, GA Lake Chelan Chamber Community Enrichment Fund, Chelan, WA Lamb of God, Inc., Franklin, NC Law & Liberty Foundation, Inc., Tallahassee, FL Leadership Encouragement and Development, Lexington, SC Lee County Soccer, Inc., Dryden, VA Liberty Foundation, Charleston, WV Lightworks Technology Foundation, Chapel Hill, NC Living Light Foundation, Inc., Augusta, GA Living Waters Foundation, Inc., Lexington, KY Los Ninos De Guatemala Foundation, McLean, VA Louis A. Martin & Behold Him Ministries, Inc., Dry Fork, VA Love God Ministries of Tallahassee, Inc., Tallahassee, FL Maguire Voorhis & Wells Foundation, Inc., Orlando, FL Make it Happen, Inc., Marietta, GA Marian County Community Development Corp., Marion, SC Marian County Humane Society, Marion, SC Marine Service Education Corporation, Clearwater, FL Marshall County Safe Home, Inc., Calver City, KY Masterworks for Kids,Inc.,Franklin,TN Mayfield Main Street, Inc., Mayfield, KY Mecklenburg Academic Rehabilitation Scholarship Fund, Matthews, NC Metropolitan Civic Orchestra, Inc., Sullivans Island, SC Midlands Community Enrichment Thru Education & Athletics Project, Orangeburg, SC Mission America, Inc., Gainesville, GA Mission Ministries Association, Inc., Bowling Green, KY Mitchells Truck Drivers School, Inc., Chicago, IL Mobile VOA Home Development, Mobile, AL Morning Star Youth Ministries, Inc., Pensacola, FL Mountain Opportunities Corporation, Clarksburg, WV Mt. Pleasant Family Care Center, Clinton, NC Museum Displays, Inc., Destin, FL My Sisters Place, Columbia, TN National Association of Church Recreators & Sports Ministers, Knoxville, TN National Centurion Corporation, Inc., St. Petersburg, FL National Coalition of Women of Commitment, Inc., Memphis, TN National Womens Recovery Network, Inc., Atlanta, GA Natural Resources Education Council, Inc., Lincolton, NC NCYAP at Colony Place, Inc., Columbia, SC Nearby in Nature, Inc., Gladstone, VA Nehemiahs Open Arms Mission, Inc., Glen Rogers, WV Network of Family Services, Inc., Atlanta, GA Never Be Defeated Ministries, Inc., Lutz, FL New Day Family-Community Life Center, Stone Mountain, GA New Hope Community Development Center, Inc., Hopewell, VA New Life Christian Training Centers, Chincoteague, VA New Sounds of Inspiration, Incorporated, Looneyville, WV Next Exit Outreach, Inc., Marietta, GA Norm Grey Creative Foundation, Inc., Atlanta, GA Northern Kentucky African-American Heritage Task Force, Covington, KY Oak Forest Amity Resident Council, Inc., Forest City, NC Ohara Ministries, Nashville, TN Okinawan Karate Club of Charlotte, Charlotte, NC Organ Donor Foundation, Inc., Marietta, GA Our Town, Inc., W. Pointe, GA P A C T Ministry, Inc., Alpharetta, GA Palama Scholarship Foundation, Honolulu, HI Parent & Child Connections, Inc., Great Falls, VA Partnership for a Healthy Community, Inc., Pensacola, FL Patch of Harrison County, Inc., Clarksburg, WV Patrons of the Arts in the Vatican Museums, Washington, DC Patterson Outreach Ministries, Greensboro, NC Paulding Pregnancy Services, Inc., Dallas, TX Peach Foundation for Children, Inc., Atlanta, GA Peachcrest, Inc., Red Oak, GA People Encouraging People, Inc., Lakeland, FL People Helping People Ministries, Inc., Stanley, NC Perez Momon Evangelistic Ministries, Inc., Stone Mountain, GA Pinellas County Allstars, Inc., Clearwater, FL Pop Warner Little Scholars, Inc., Clermont, FL Pop Warner Little Scholars, Inc., Immokalee, FL November 1, 20047812004–44 I.R.B. Pop Warner Little Scholars, Inc./ Greater Port St. Lucie Football League, Inc., Port St. Lucie, FL Positive People, Inc., Fayetteville, NC Potomac Westmoreland Shores Neighborhood Watch Committee, Colonial Beach, VA Praise Ministry, Inc., Partners for Christ, Sanford, NC Project of Pike C A S A Program, Inc., Elkhorn City, KY Psalms 23 Project, Inc., Decatur, GA Quiet Miracles, Inc., Winston Salem, NC R & R Series Company, Incorporated, Hampton, VA Re-Birth Childrens Center, Inc., Tampa, FL Red & White, Inc., Winter Park, FL Revelations Gospel Music Ministries, Inc., Charleston, WV RIFF, Inc., Piedmont, SC Rimes Ministries, Elizabethtown, NC Rossetter House Foundation, Inc., Tampa, FL Rowland Youth Club, Rowland, NC Saddle Up for Kids, Lawrenceville, GA Sandyridge Action Community Organization, Inc., Rockingham, NC SBH Genetic Foundation, Inc., Tallahassee, FL SC Chapter of the Alexander Graham Bell Association for the Deaf, Columbia, SC Seek Jesus Ministries, Alamance, NC Serenata, Greenville, SC Shackelford Horse Association, Inc., Cedar Island, NC Shared Resources, Inc., Orlando, FL Shelter Society, Inc., Oneida, TN Shenandoah Legends Fast Pitch, Harrisburg, VA Shirleys Home, Inc., Durham, NC Sickle Cell Disease Association of Okaloosa & Walton County, Inc., Eglin AFB, FL So Can I, Inc., Deland, FL Society of Primary Care Policy Fellows, Washington, DC Sonsa, Burlington, NC South Gwinnett Diamond Club, Inc., Snellville, GA South Hillsborough Community Cupboard, Inc., Ruskin, FL South Memphis Alliance, Incorporated, Memphis, TN Southern Baseball Classic, Inc., Hartsville, SC Southway Alumni Association, Charleston, WV Sox Association, Alpharetta, GA Space Coast Sports Promotion, Inc., Cocoa Beach, FL Spencer J. McCallie Homes Resident Council, Incorporated, Chattanooga, TN Springdale Housing Phase II, Inc., Dunn, NC Spruce River Volunteer Fire Dept. Ladies Auxiliary, Madison, WV St. Mark Family Life Center, Inc., Orlando, FL Stefanie Roth Memorial Cancer Foundation, Inc., Naples, FL Storytime Childrens Outreach, Inc., McDonough, GA Strikeforce Softball Association, Ozona, FL Students for Community Assistance Regarding the Elderly, Inc., Orange Park, FL STUN-Stop Teens From Using Narcotics, Charlotte, NC Summerhill Sports Foundation, Inc., Atlanta, GA Sumter Leaders for Sumter School District 17, Sumter, SC S W A T Team Ministry, Milton, FL T-Connection for Senior Citizens Club, Southern Pines, NC Tampa Bay Academy of Hope, Inc., Tampa, FL Tennessee Valley Building Energy Management Corporation, Nashville, TN TFA Environmental Services, Inc., Yorkville, TN Timothy Foundation Ministries, Inc., Taylors, SC Tiny Treasures-A Child’s Place, Inc., Stockbridge, GA Torah From Dixie, Inc., Atlanta, GA Torch Missions USA, Inc., Fairfax, VA Trans-World Bible Society, Memphis, TN Triangle Knights, Inc., Durham, NC Twin Towers BMX Association, Inc., Raleigh, NC Ugandan North American Association, Inc., Burke, VA Upper Ohio Valley Redevelopment and Housing Corporation, Moundsville, WV Upward Challenge, Inc., Beaufort, SC Urbana Swim Team, Inc., Urbana, VA Vernon K. Willoborg Charitable Trust, Houston, TX Veterans Assistance Foundation of Georgia, Inc., Smyrna, GA Victims of Violent Crimes Foundation, Jacksonville, FL Vietnamese Community of Louisville, KY, Louisville, KY Village Alliance, Inc., Atlanta, GA Vision Outreach Ministries, Inc., Statesville, NC W. E. Freeman Outreach, Inc., Orlando, FL Waccamaw Animal Rescue Mission, Conway, SC Washad, Inc., East Point, GA We Care for You Ministries, Tampa, FL We Love Your Children Day Care, Inc., Forrest Park, GA Wesley at Brownsville, Inc., Memphis, TN Wesley at Milan, Inc., Memphis, TN West Jackson Booster Club, Braselton, GA West Tennesseans for Clean Water & Environment, Arlington, TN White Station Baseball Club, Memphis, TN Whizz Kids, Inc., Memphis, TN Wilmington Sports Alliance Soccer Academy, Inc., Wilmington, NC Wolverine Baseball Foundation, Garrisonville, VA Woman to Woman Resource Center, Salisbury, NC Women in Transition 2000, Alexandria, CA Word Power Prison Ministry, Inc., Newnan, GA Youth on Ice, Inc., Virginia Beach, VA Youth Quest Corporation, Memphis, TN If an organization listed above submits information that warrants the renewal of its classification as a public charity or as a private operating foundation, the Inter- nalRevenueServicewillissuearulingor determinationletterwiththerevisedclas- sification as to foundation status. Grantors and contributors may thereafter rely upon such ruling or determination letter as pro- videdinsection1.509(a)–7oftheIncome Tax Regulations. It is not the practice of the Service to announce such revised clas- sification of foundation status in the Inter- nal Revenue Bulletin. 2004–44 I.R.B.782November 1, 2004 Definition of Terms 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 ef- fect: Amplifieddescribes a situation where no change is being made in a prior pub- lished position, but the prior position is be- ingextendedtoapplytoavariationofthe fact situation set forth therein. Thus, if an earlier ruling held that a principle ap- plied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare withmodi- fied,below). Clarifiedis used in those instances where the language in a prior ruling is be- ing 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. Distinguisheddescribes a situation where a ruling mentions a previously pub- lished ruling and points out an essential difference between them. Modifiedis 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 withamplifiedandclarified, above). Obsoleteddescribes a previously pub- lished ruling that is not considered deter- minative with respect to future transac- tions. This term is most commonly used in a ruling that lists previously published rul- ings 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. Revokeddescribes situations where the position in the previously published ruling is not correct and the correct position is beingstatedinanewruling. Supersededdescribes a situation where the new ruling does nothing more than re- state the substance and situation of a previ- ously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same po- sition published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single rul- ing a series of situations, names, etc., that were previously published over a period of time in separate rulings. If the new rul- ing does more than restate the substance of a prior ruling, a combination of terms is used. For example,modifiedandsu- persededdescribes 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 pub- lished ruling is first modified and then, as modified, is superseded. Supplementedis 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 rul- ing has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the ad- ditions, and supersedes all prior rulings in the series. Suspendedis used in rare situations to show that the previous published rul- ings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study. Abbreviations The fol lowing abbreviations in current use and for merly used will appear in material publis hedintheBulletin. A—Individual. Acq.—A cquiescence. B—Individual. BE—Beneficiary. BK—Bank . B.T.A.—Board of Tax Appeals. C—Individual. C.B.—Cu mulative Bulletin. CFR—Code of Federal Regulations. CI—City. COOP—Coo perative. Ct.D.—Court Decision. CY—County. D—Decede nt. DC—Dummy Corporation. DE—Donee. Del. Order —Delegation Order. DISC—Domestic International Sales Corporation. DR—Donor. E—Estate. EE—Employee. E.O.—Executive Order. ER—Emp loyer. ERISA—Employee Retirement Income Security Act. EX—Executor. F—Fiduc iary. FC—Foreign Country. FICA—Federal Insurance Contributions Act. FISC—Fo reign International Sales Company. FPH—Foreign Personal Holding Company. F.R.—Federal Register. FUTA—Fed eral Unemployment Tax Act. FX—Foreign corporation. G.C.M.—Chief Counsel’s Memorandum. GE—Grante e. GP—General Partner. GR—Grantor. IC—Insura nce Company. I.R.B.—Internal Revenue Bulletin. LE—Lessee. LP—Limited Partner. LR—Lessor. M—Minor. Nonacq.—No nacquiescence. O—Organization. P—Parent Corporation. PHC—Persona l Holding Company. PO—Possession of the U.S. PR—Partner. PRS—Pa rtnership. PTE—Prohibited Transaction Exemption. Pub. L.—Public Law. REIT—Re al Estate Investment Trust. Rev. Proc.—Revenue Procedure. Rev. Rul.—Revenue Ruling. S—Subsi diary. S.P.R.—Statement of Procedural Rules. Stat.—Statutes at Large. T—Target Corporation. T.C.—Tax Court. T.D.—Treasury Decision. TFE—Trans feree. TFR—Transferor. T.I.R.—Technical Information Release. TP—Taxpay er. TR—Trust. TT—Trustee. U.S.C.—Uni ted States Code. X—Corporation. Y—Corporation. Z—Corporat ion. November 1, 2004i2004–44 I.R.B. Numerical Finding List 1 Bulletins 2004–27 through 2004–44 Announcements: 2004-55, 2004-27 I.R.B.15 2004-56, 2004-28 I.R.B.41 2004-57, 2004-27 I.R.B.15 2004-58, 2004-29 I.R.B.66 2004-59, 2004-30 I.R.B.94 2004-60, 2004-29 I.R.B.43 2004-61, 2004-29 I.R.B.67 2004-62, 2004-30 I.R.B.103 2004-63, 2004-31 I.R.B.149 2004-64, 2004-35 I.R.B.402 2004-65, 2004-33 I.R.B.300 2004-66, 2004-35 I.R.B.402 2004-67, 2004-36 I.R.B.459 2004-68, 2004-38 I.R.B.508 2004-69, 2004-39 I.R.B.542 2004-70, 2004-39 I.R.B.543 2004-71, 2004-40 I.R.B.569 2004-72, 2004-41 I.R.B.650 2004-73, 2004-39 I.R.B.543 2004-74, 2004-40 I.R.B.579 2004-75, 2004-40 I.R.B.580 2004-76, 2004-40 I.R.B.588 2004-77, 2004-41 I.R.B.662 2004-78, 2004-40 I.R.B.592 2004-79, 2004-41 I.R.B.662 2004-80, 2004-41 I.R.B.663 2004-81, 2004-42 I.R.B.675 2004-83, 2004-43 I.R.B.712 2004-84, 2004-43 I.R.B.712 2004-85, 2004-43 I.R.B.712 2004-88, 2004-44 I.R.B.779 Notices: 2004-41, 2004-28 I.R.B.31 2004-43, 2004-27 I.R.B.10 2004-44, 2004-28 I.R.B.32 2004-45, 2004-28 I.R.B.33 2004-46, 2004-29 I.R.B.46 2004-47, 2004-29 I.R.B.48 2004-48, 2004-30 I.R.B.88 2004-49, 2004-30 I.R.B.88 2004-50, 2004-33 I.R.B.196 2004-51, 2004-30 I.R.B.89 2004-52, 2004-32 I.R.B.168 2004-53, 2004-33 I.R.B.209 2004-54, 2004-33 I.R.B.209 2004-55, 2004-34 I.R.B.319 2004-56, 2004-35 I.R.B.375 2004-57, 2004-35 I.R.B.376 2004-58, 2004-39 I.R.B.520 2004-59, 2004-36 I.R.B.447 Notices— Continued: 2004-60, 2004-40 I.R.B.564 2004-61, 2004-41 I.R.B.596 2004-62, 2004-40 I.R.B.565 2004-63, 2004-41 I.R.B.597 2004-64, 2004-41 I.R.B.598 2004-65, 2004-41 I.R.B.599 2004-66, 2004-42 I.R.B.677 2004-67, 2004-41 I.R.B.600 2004-68, 2004-43 I.R.B.706 2004-69, 2004-43 I.R.B.706 2004-70, 2004-44 I.R.B.724 Proposed Regulations: REG-208246-90, 2004-36 I.R.B.450 REG-138176-02, 2004-43 I.R.B.710 REG-153841-02, 2004-31 I.R.B.145 REG-163679-02, 2004-35 I.R.B.390 REG-163909-02, 2004-38 I.R.B.499 REG-108637-03, 2004-37 I.R.B.472 REG-120616-03, 2004-37 I.R.B.474 REG-124405-03, 2004-35 I.R.B.394 REG-131486-03, 2004-28 I.R.B.36 REG-131786-03, 2004-38 I.R.B.500 REG-145987-03, 2004-39 I.R.B.523 REG-145988-03, 2004-42 I.R.B.693 REG-149524-03, 2004-39 I.R.B.528 REG-150562-03, 2004-32 I.R.B.175 REG-152549-03, 2004-36 I.R.B.451 REG-154077-03, 2004-37 I.R.B.476 REG-169135-03, 2004-42 I.R.B.697 REG-171386-03, 2004-37 I.R.B.477 REG-101282-04, 2004-42 I.R.B.698 REG-101447-04, 2004-34 I.R.B.344 REG-106889-04, 2004-38 I.R.B.501 REG-116265-04, 2004-38 I.R.B.505 REG-117307-04, 2004-28 I.R.B.39 REG-124872-04, 2004-39 I.R.B.533 REG-128767-04, 2004-39 I.R.B.534 REG-129274-04, 2004-40 I.R.B.567 REG-129706-04, 2004-37 I.R.B.478 REG-129771-04, 2004-36 I.R.B.453 REG-130863-04, 2004-39 I.R.B.538 REG-131264-04, 2004-38 I.R.B.506 REG-135898-04, 2004-40 I.R.B.568 REG-136481-04, 2004-37 I.R.B.480 Revenue Procedures: 2004-38, 2004-27 I.R.B.10 2004-39, 2004-29 I.R.B.49 2004-40, 2004-29 I.R.B.50 2004-41, 2004-30 I.R.B.90 2004-42, 2004-31 I.R.B.121 2004-43, 2004-31 I.R.B.124 2004-44, 2004-31 I.R.B.134 2004-45, 2004-31 I.R.B.140 Revenue Procedures— Continued: 2004-46, 2004-31 I.R.B.142 2004-47, 2004-32 I.R.B.169 2004-48, 2004-32 I.R.B.172 2004-49, 2004-33 I.R.B.210 2004-50, 2004-33 I.R.B.211 2004-51, 2004-33 I.R.B.294 2004-52, 2004-34 I.R.B.319 2004-53, 2004-34 I.R.B.320 2004-54, 2004-34 I.R.B.325 2004-55, 2004-34 I.R.B.343 2004-56, 2004-35 I.R.B.376 2004-57, 2004-38 I.R.B.498 2004-58, 2004-41 I.R.B.602 2004-59, 2004-42 I.R.B.678 2004-60, 2004-42 I.R.B.682 2004-61, 2004-43 I.R.B.707 2004-62, 2004-44 I.R.B.728 Revenue Rulings: 2004-63, 2004-27 I.R.B.6 2004-64, 2004-27 I.R.B.7 2004-65, 2004-27 I.R.B.1 2004-66, 2004-27 I.R.B.4 2004-67, 2004-28 I.R.B.28 2004-68, 2004-31 I.R.B.118 2004-69, 2004-36 I.R.B.445 2004-70, 2004-37 I.R.B.460 2004-71, 2004-30 I.R.B.74 2004-72, 2004-30 I.R.B.77 2004-73, 2004-30 I.R.B.80 2004-74, 2004-30 I.R.B.84 2004-75, 2004-31 I.R.B.109 2004-76, 2004-31 I.R.B.111 2004-77, 2004-31 I.R.B.119 2004-78, 2004-31 I.R.B.108 2004-79, 2004-31 I.R.B.106 2004-80, 2004-32 I.R.B.164 2004-81, 2004-32 I.R.B.161 2004-82, 2004-35 I.R.B.350 2004-83, 2004-32 I.R.B.157 2004-84, 2004-32 I.R.B.163 2004-85, 2004-33 I.R.B.189 2004-86, 2004-33 I.R.B.191 2004-87, 2004-32 I.R.B.154 2004-88, 2004-32 I.R.B.165 2004-89, 2004-34 I.R.B.301 2004-90, 2004-34 I.R.B.317 2004-91, 2004-35 I.R.B.357 2004-92, 2004-37 I.R.B.466 2004-93, 2004-37 I.R.B.462 2004-94, 2004-38 I.R.B.491 2004-95, 2004-38 I.R.B.492 2004-96, 2004-41 I.R.B.593 2004-97, 2004-39 I.R.B.516 2004-98, 2004-42 I.R.B.664 1 A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2004–1 through 2004–26 is in Internal Revenue Bulletin 2004–26, dated June 28, 2004. 2004–44 I.R.B.iiNovember 1, 2004 Revenue Rulings— Continued: 2004-99, 2004-44 I.R.B.720 2004-100, 2004-44 I.R.B.718 2004-101, 2004-44 I.R.B.719 Tax Conventions: 2004-60, 2004-29 I.R.B.43 2004-81, 2004-42 I.R.B.675 Treasury Decisions: 9131, 2004-27 I.R.B.2 9132, 2004-28 I.R.B.16 9133, 2004-28 I.R.B.25 9134, 2004-30 I.R.B.70 9135, 2004-30 I.R.B.69 9136, 2004-31 I.R.B.112 9137, 2004-34 I.R.B.308 9138, 2004-32 I.R.B.160 9139, 2004-38 I.R.B.495 9140, 2004-32 I.R.B.159 9141, 2004-35 I.R.B.359 9142, 2004-34 I.R.B.302 9143, 2004-36 I.R.B.442 9144, 2004-36 I.R.B.413 9145, 2004-37 I.R.B.464 9146, 2004-36 I.R.B.408 9147, 2004-37 I.R.B.461 9148, 2004-37 I.R.B.460 9149, 2004-38 I.R.B.494 9150, 2004-39 I.R.B.514 9151, 2004-38 I.R.B.489 9152, 2004-39 I.R.B.509 9153, 2004-39 I.R.B.517 9154, 2004-40 I.R.B.560 9155, 2004-40 I.R.B.562 9156, 2004-42 I.R.B.669 9157, 2004-40 I.R.B.545 9158, 2004-42 I.R.B.665 9161, 2004-43 I.R.B.704 November 1, 2004iii2004–44 I.R.B. Findings List of Current Actions on Previously Published Items 1 Bulletins 2004–27 through 2004–44 Announcements: 99-76 Obsoleted by T.D. 9157, 2004-40 I.R.B.545 2003-54 Updated and superseded by Ann. 2004-72, 2004-41 I.R.B.650 2004-70 Amended by Ann. 2004-77, 2004-41 I.R.B.662 Notices: 88-128 Supplemented by Notice 2004-61, 2004-41 I.R.B.596 98-65 Superseded by Rev. Proc. 2004-40, 2004-29 I.R.B.50 2001-50 Modified by Rev. Proc. 2004-46, 2004-31 I.R.B.142 2002-70 Modified by Notice 2004-65, 2004-41 I.R.B.599 2003-76 Supplemented and superseded by Notice 2004-67, 2004-41 I.R.B.600 Modified by Notice 2004-65, 2004-41 I.R.B.599 2004-2 Modified by Notice 2004-50, 2004-33 I.R.B.196 2004-2, Corrected by Ann. 2004-67, 2004-36 I.R.B.459 Proposed Regulations: INTL-116-90 Withdrawn by REG-208246-90, 2004-36 I.R.B.450 REG-208254-90 Withdrawn by REG-136481-04, 2004-37 I.R.B.480 REG-104683-00 Partially withdrawn by Ann. 2004-64, 2004-35 I.R.B.402 REG-165579-02 Withdrawn by Ann. 2004-69, 2004-39 I.R.B.542 Proposed Regulations— Continued: REG-150562-03 Corrected by Ann. 2004-68, 2004-38 I.R.B.508 Ann. 2004-73, 2004-39 I.R.B.543 Revenue Procedures: 79-61 Superseded by Rev. Proc. 2004-44, 2004-31 I.R.B.134 89-37 Obsoleted by Rev. Rul. 2004-90, 2004-34 I.R.B.317 94-64 Superseded by Rev. Proc. 2004-38, 2004-27 I.R.B.10 96-18 Obsoleted by Rev. Rul. 2004-90, 2004-34 I.R.B.317 96-53 Superseded by Rev. Proc. 2004-40, 2004-29 I.R.B.50 96-60 Superseded by Rev. Proc. 2004-53, 2004-34 I.R.B.320 98-41 Superseded by Rev. Proc. 2004-56, 2004-35 I.R.B.376 2000-37 Modified by Rev. Proc. 2004-51, 2004-33 I.R.B.294 2002-9 Modified and amplified by Rev. Proc. 2004-41, 2004-30 I.R.B.90 2003-28 Superseded by Rev. Proc. 2004-58, 2004-41 I.R.B.602 2003-30 Superseded by Rev. Proc. 2004-54, 2004-34 I.R.B.325 2003-52 Superseded by Rev. Proc. 2004-50, 2004-33 I.R.B.211 2003-73 Superseded by Rev. Proc. 2004-62, 2004-44 I.R.B.728 2003-80 Superseded by Rev. Proc. 2004-60, 2004-42 I.R.B.682 2004-4 Modified by Rev. Proc. 2004-44, 2004-31 I.R.B.134 Revenue Procedures— Continued: 2004-23 Modified by Rev. Proc. 2004-57, 2004-38 I.R.B.498 Revenue Rulings: 54-379 Superseded by Rev. Rul. 2004-68, 2004-31 I.R.B.118 58-120 Obsoleted by Rev. Rul. 2004-90, 2004-34 I.R.B.317 62-60 Amplified by Rev. Proc. 2004-53, 2004-34 I.R.B.320 70-58 Obsoleted by Rev. Rul. 2004-90, 2004-34 I.R.B.317 73-354 Obsoleted by Rev. Rul. 2004-76, 2004-31 I.R.B.111 78-371 Distinguished by Rev. Rul. 2004-86, 2004-33 I.R.B.191 79-64 Obsoleted by Rev. Rul. 2004-90, 2004-34 I.R.B.317 80-7 Amplified and clarified by Rev. Rul. 2004-71, 2004-30 I.R.B.74 Rev. Rul. 2004-72, 2004-30 I.R.B.77 Rev. Rul. 2004-73, 2004-30 I.R.B.80 Rev. Rul. 2004-74, 2004-30 I.R.B.84 80-366 Obsoleted by Rev. Rul. 2004-90, 2004-34 I.R.B.317 81-100 Clarified and modified by Rev. Rul. 2004-67, 2004-28 I.R.B.28 85-70 Amplified and clarified by Rev. Rul. 2004-71, 2004-30 I.R.B.74 Rev. Rul. 2004-72, 2004-30 I.R.B.77 Rev. Rul. 2004-73, 2004-30 I.R.B.80 Rev. Rul. 2004-74, 2004-30 I.R.B.84 92-105 Distinguished by Rev. Rul. 2004-86, 2004-33 I.R.B.191 2004-75 Amplified by Rev. Rul. 2004-97, 2004-39 I.R.B.516 1 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. 2004–44 I.R.B.ivNovember 1, 2004 Treasury Decisions: 9031 Removed by T.D. 9152, 2004-39 I.R.B.509 November 1, 2004v2004–44 I.R.B. *U.S.G overnment Printing O ff ice: 2 004 —310–365/60159
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