Internal Revenue Bulletin 2007-30 (PDF rendition): IRS Revenue Rulings

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

Bulletin No. 200
7-30
July 23, 2007
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. 2007–46, page 126.
Low-income housing credit; satisfactory bond; “bond
factor” amounts for the period January through Septem-
ber 2007.This ruling provides the monthly bond factor
amounts to be used by taxpayers who dispose of qualified
low-income buildings or interests therein during the period
January through September 2007.
Rev. Rul.
2007–47, page 127.
Insurance
premium.This ruling holds that an arrangement
that prov
ides for the reimbursement of inevitable future costs
does not i
nvolve the requisite insurance risk for purposes of de-
terminin
g (i) whether the amount paid for the arrangement is de-
ductible
as an insurance premium and (ii) whether the assuming
entity ma
y account for the arrangement as an ‘insurance con-
tract’ f
or purposes of subchapter L of the Code. Stakeholders
are aske
d to comment on the application of the rationale of the
revenue
ruling outside of its facts. Rev. Rul. 89–96 amplified.
Rev. Rul. 2007–48, page 129.
Nonexempt employees’ trusts.This ruling considers the
federal tax consequences to the employees, the employer, and
the trust when an employer contributes to a nonexempt em-
ployees’ trust on behalf of highly compensated employees. It
also explains the effects of vesting of an employee’s interest
in the trust and distributions from the trust. Rev. Rul. 74–299
amplified.
Notice 2007–59, page 135.
This notice provides a proposed revenue procedure that estab-
lishes a procedure for a payment card organization to request a
determination that it is a Qualified Payment Card Agent (QPCA).
Rev. Proc. 2007–53, page 233.
Accounting for advance trade discounts.This procedure
provides that the Service will followWestpac Pacific Food v.
Commissioner,451 F.3d 970 (9th Cir. 2006) with respect
to taxpayers that adopt the Advance Trade Discount Method
of accounting as provided in this procedure. The document
also provides procedures for obtaining automatic consent to
change to this method of accounting. Rev. Proc. 2002–9
modified and amplified.
EMPLOYEE PLANS
Rev. Rul. 2007–48, page 129.
Nonexempt employees’ trusts.This ruling considers the
federal tax consequences to the employees, the employer, and
the trust when an employer contributes to a nonexempt em-
ployees’ trust on behalf of highly compensated employees. It
also explains the effects of vesting of an employee’s interest
in the trust and distributions from the trust. Rev. Rul. 74–299
amplified.
Notice 2007–61, page 140.
Weighted average interest rate update; corporate bond
indices; 30-year Treasury securities.The weighted aver-
age interest rate for July 2007 and the resulting permissible
range of interest rates used to calculate current liability and to
determine the required contribution are set forth.
Rev. Proc. 2007–49, page 141.
Administrative programs; correction programs.This pro-
cedure updates the Service’s correction programs for retire-
ment plans within the jurisdiction of the Commissioner, Tax Ex-
empt and Government Entities Operating Division. Rev. Proc.
2006–27 modified.
(Continued on the next page)
Actions Relating to Court Decisions is on the page following the Introduction.
Fi
nding Lists begin on page ii.

Announcement 2007–63, page 236.
Form 5500; elimination of Schedule P.This announcement
states that, for plan years in which the Schedule P is eliminated,
the Service will treat the plan’s filing of a return from the ap-
plicable Form 5500 series as if the filing constitutes a return
of the plan’s employee benefit trust for purposes of section
6501(g)(2) of the Code.
EXEMPT ORGANIZATIONS
Rev. Proc. 2007–52, page 222.
This procedure sets forth procedures for issuing determination
letters and rulings on the exempt status of organizations under
sections 501 and 521 of the Code. The procedures also apply
to revocation and modification of determination letters or rul-
ings, and provide guidance on the exhaustion of administrative
remedies for purposes of declaratory judgment under section
7428. Rev. Proc. 90–27 superseded.
Announcement 2007–65, page 236.
The IRS has revoked its determination that Eagle A C, Inc., of
Louisville, KY, and Annie T. Smith Mercy Fund of Randolf, VT,
qualify as organizations described in sections 501(c)(3) and
170(c)(2) of the Code.
EMPLOYMENT TAX
Rev. Rul. 2007–48, page 129.
Nonexempt employees’ trusts.This ruling considers the
federal tax consequences to the employees, the employer, and
the trust when an employer contributes to a nonexempt em-
ployees’ trust on behalf of highly compensated employees. It
also explains the effects of vesting of an employee’s interest
in the trust and distributions from the trust. Rev. Rul. 74–299
amplified.
ADMINISTRATIVE
Rev. Proc. 2007–51, page 143.
Electronic filing; magnetic media; 2007 form specifi-
cations.This procedure contains updates and changes to
Publication 1220,Specifications for Filing Forms 1098, 1099,
5498 and W–2G, Electronically or Magnetically.Rev.Proc.
2006–33 superseded.
July 23, 20072007–30 I.R.B.

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.
2007–30 I.R.B.July 23, 2007

Actions Relating to Decisions of the Tax Court
It is the policy of the Internal Rev-
enue Service to announce at an early date
whether it will follow the holdings in cer-
tain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued at
the discretion of the Service only on unap-
pealed issues decided adverse to the gov-
ernment. Generally, an Action on Decision
is issued where its guidance would be help-
ful to Service personnel working with the
same or similar issues. Unlike a Treasury
Regulation or a Revenue Ruling, an Action
on Decision is not an affirmative statement
of Service position. It is not intended to
serve as public guidance and may not be
cited as precedent.
Actions on Decisions shall be relied
upon within the Service only as conclu-
sions applying the law to the facts in the
particular case at the time the Action on
Decision was issued. Caution should be
exercised in extending the recommenda-
tion of the Action on Decision to similar
cases where the facts are different. More-
over, the recommendation in the Action on
Decision may be superseded by new legis-
lation, regulations, rulings, cases, or Ac-
tions on Decisions.
Prior to 1991, the Service published
acquiescence or nonacquiescence only in
certain regular Tax Court opinions. The
Service has expanded its acquiescence
program to include other civil tax cases
where guidance is determined to be help-
ful. Accordingly, the Service now may
acquiesce or nonacquiesce in the holdings
of memorandum Tax Court opinions, as
well as those of the United States District
Courts, Claims Court, and Circuit Courts
of Appeal. Regardless of the court decid-
ing the case, the recommendation of any
Action on Decision will be published in
the Internal Revenue Bulletin.
The recommendation in every Action
on Decision will be summarized as ac-
quiescence, acquiescence in result only,
or nonacquiescence. Both “acquiescence”
and “acquiescence in result only” mean
that the Service accepts the holding of
the court in a case and that the Service
will follow it in disposing of cases with
the same controlling facts. However, “ac-
quiescence” indicates neither approval
nor disapproval of the reasons assigned
by the court for its conclusions; whereas,
“acquiescence in result only” indicates
disagreement or concern with some or all
of those reasons. “Nonacquiescence” sig-
nifies that, although no further review was
sought, the Service does not agree with
the holding of the court and, generally,
will not follow the decision in disposing
of cases involving other taxpayers. In
reference to an opinion of a circuit court
of appeals, a “nonacquiescence” indicates
that the Service willnot follow the hold-
ing on a nationwide basis. However, the
Service will recognize the precedential
impact of the opinion on cases arising
within the venue of the deciding circuit.
The Actions on Decisions published in
the weekly Internal Revenue Bulletin are
consolidated semiannually and appear in
the first Bulletin for July and the Cumula-
tive Bulletin for the first half of the year. A
semiannual consolidation also appears in
the first Bulletin for the following January
and in the Cumulative Bulletin for the last
half of the year.
The Commissioner does NOT ACQUI-
ESCE in the following decision:
Snider v. United States; Turley v.
United States,
1
468 F.3d 500 (8th Cir. 2006),
petition for reh’g en banc denied,
No. 05–3636 (8th Cir. Feb. 1, 2007)
1
Nonacquiescence relating to whether a special agent’s disclosure of the identity of a taxpayer under investigation to a third-party witness is not authorized by section 6103(k)(6); whether
even if the disclosure was not authorized, the good faith defense provided by section 7431(b) does not apply; and whether section 7431(c)(1), in providing for statutory damages of $1,000 per
“act of...disclosure,”providesforstatutorydamagesbasedoneach item of return information disclosed during a single interview and for each person who heard the disclosure.
July 23, 20072007–30 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 September
2007.This ruling provides 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 September 2007.
Rev. Rul. 2007–46
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 Secre-
tary under § 42(j)(6) of the Internal Rev-
enue Code. It further announced that the
Secretary would publishintheInternal
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 Septem-
ber 2007.
Table 1
Rev. Rul. 2007–46
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
19931994199519961997199819992000200120022003
Jan ’0717.3932.4445.5256.9766.9569.2371.8674.7478.0981.8285.82
Feb ’0717.3932.4445.5256.9766.9569.0871.7074.5677.8981.6085.57
Mar ’0717.3932.4445.5256.9766.9568.9271.5374.3977.7181.4085.33
Apr ’0717.3932.4445.5256.9766.9568.7771.3774.2277.5281.1985.11
May ’0717.3932.4445.5256.9766.9568.6271.2274.0577.3581.0084.89
Jun ’0717.3932.4445.5256.9766.9568.4771.0673.8977.1780.8184.68
Jul ’0717.3932.4445.5256.9766.9568.3270.9173.7477.0180.6384.47
Aug ’0717.3932.4445.5256.9766.9568.1870.7673.5876.8480.4584.28
Sep ’0717.3932.4445.5256.9766.9568.0470.6273.4376.6880.2784.09
Table 1 (cont’d)
Rev. Rul. 2007–46
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
2004200520062007
Jan ’0789.7993.4196.70 97.21
Feb ’0789.5093.0796.27 97.21
Mar ’0789.2292.7595.89 97.21
2007–30 I.R.B.126July 23, 2007

Table 1 (cont’d)
Rev. Rul. 2007–46
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
2004200520062007
Apr ’0788.9692.4695.57 97.21
May ’0788.7292.1895.28 97.21
Jun ’0788.4891.9395.02 97.21
Jul ’0788.2591.6994.79 97.21
Aug ’0788.0491.4694.58 97.21
Sep ’0787.8391.2594.39 97.21
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; Rev. Rul. 2003–117,
2003–2 C.B. 1051; Rev. Rul. 2004–100,
2004–2 C.B. 718; Rev. Rul. 2005–67,
2005–2 C.B. 771; and Rev. Rul. 2006–51,
2006–2 C.B. 632.
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 162.—Trade or
Business Expenses
26 CFR 1.162–1: Business expenses.
(Also §§ 461; 831.)
Insurance premium.This ruling
holds that an arrangement that provides
for the reimbursement of inevitable fu-
ture costs does not involve the requisite
insurance risk for purposes of determin-
ing (i) whether the amount paid for the
arrangement is deductible as an insurance
premium and (ii) whether the assuming
entity may account for the arrangement
as an ‘insurance contract’ for purposes of
subchapter L of the Code. Stakeholders
are asked to comment on the application of
the rationale of the revenue ruling outside
of its facts. Rev. Rul. 89–96 amplified.
Rev. Rul. 2007–47
ISSUE
Does the arrangement described below
involve the requisite insurance risk to con-
stitute insurance for purposes of determin-
ing (i) whetherXmay deduct the amount
paid under the arrangement as an “insur-
ance premium” under § 162 of the Internal
Revenue Code, and (ii) whetherICmay ac-
count for the arrangement as an “insurance
contract” for purposes of subchapter L of
the Code?
FACTS
X, a domestic corporation that uses an
accrual method of accounting, is engaged
in a Business Process that is inherently
harmful to people and property. Applica-
ble governmental regulations requireXto
take action to remediate that harm. Doing
so will requireXto incur Future Costs to
undertake specific measures to restoreX’s
business location to its condition before
Business Process began; the Future Costs
will be incurred whenXceases to engage
in Business Process. The exact amount
and timing of the Future Costs are a func-
tion of many factors, including the future
cost of wages, future cost of materials, fu-
ture changes in the regulation of Business
Process, and the timing ofX’s discontin-
uation of Business Process. There is no
uncertainty, however, that the Future Costs
will be incurred.
WhenXbegan Business Process in Year
1, it estimated that the present value of Fu-
ture Costs was $150x, based on its eval-
uation of the factors identified above and
an appropriate discount rate based on eco-
nomic projections. At that time,Xen-
tered into an arrangement withIC, an un-
related domestic insurance company tax-
able under § 831. Under the arrangement,
Xagreed to payIC$150x,andICagreed
to reimburseXfor its Future Costs, up to
a limit of $300x. The arrangement had no
limits on its duration.
LAW
Section 162(a) provides, in part, that
there shall be allowed as a deduction all
the ordinary and necessary expenses paid
or incurred during the taxable year in car-
rying on any trade or business. Section
1.162–1(a) of the Income Tax Regulations
provides, in part, that among the items in-
cluded in deductible business expenses are
insurance premiums against fire, storm,
theft, accident, or other similar losses in
the case of a business.
Section 461 provides that the amount
of any deduction shall be taken for the
taxable year which is the proper taxable
year under the method of accounting used
by the taxpayer in computing taxable in-
come. Under § 1.461–1(a)(2), a liability
is incurred and generally is taken into ac-
count under an accrual method of account-
ing in the taxable year in which all the
events have occurred that establish the fact
July 23, 20071272007–30 I.R.B.

of the liability, the amount of the liability
can be determined with reasonable accu-
racy, and economic performance has oc-
curred with respect to the liability. Sec-
tion 1.461–4(g)(5) provides that if a liabil-
ity arises out of the provision to the tax-
payer of insurance, economic performance
occurs as payment is made to the person to
which the liability is owed. If the period
of coverage extends substantially beyond
the close of the taxable year, however, the
amount permitted to be taken into account
in the year of payment is determined under
the capitalization rules of § 263. Section
1.461–4(g)(8)(Ex. 6); § 1.263–4(d)(3)(i).
Characterization of an arrangement as
insurance has consequences for the issuer,
as well. Section 831(a) provides that taxes,
computed as provided in § 11, are im-
posed for each taxable year on the taxable
income of each insurance company other
than a life insurance company. Section
832(a) provides that for this purpose, tax-
able income means the gross income as de-
fined in § 832(b)(1) less the deductions al-
lowed by § 832(c). Gross income includes
underwriting income, which is defined in
§ 832(b)(3) as premiums earned on in-
surance contracts during the taxable year,
less losses incurred and expenses incurred.
Premiums earned and losses incurred on
insurance contracts are computed taking
into account reserves for unearned premi-
ums under § 832(b)(4) and for discounted
unpaid losses under § 832(b)(5), respec-
tively. If an arrangement is not an insur-
ance contract, no reserves are permitted
for unearned premiums or for discounted
unpaid losses with respect to the arrange-
ment. Even if an arrangement is an insur-
ance contract, no reserve is permitted for
discounted unpaid losses until a loss has
been “incurred.”
Neither the Code nor the regulations
define the terms “insurance” or “insur-
ance contract.” The Supreme Court of
the United States has explained that in
order for an arrangement to constitute in-
surance for federal income tax purposes,
both risk shifting and risk distribution
must be present.Helvering v. Le Gierse,
312 U.S. 531 (1941). The risk transferred
must be risk of economic loss.Allied Fi-
delity Corp. v. Commissioner, 572 F.2d
1190, 1193 (7
th
Cir. 1978). The risk must
contemplate the fortuitous occurrence of
a stated contingency,Commissioner v.
Treganowan, 183 F.2d 288, 290–91 (2d
Cir. 1950), and must not be merely an
investment or business risk.Le Gierse,
312 U.S. at 542; Rev. Rul. 89–96, 1989–2
C.B. 114.
InLe Gierse, the Court found that
complementary annuity and insurance
contracts did not involve an insurance
risk but rather an investment risk because
the risk assumed by the issuer was only
that the amount the taxpayer paid for the
contracts would earn less than the amount
paid to the taxpayer as an annuity; the to-
tal amount paid by the taxpayer exceeded
the face value of the life insurance con-
tract. This risk, the Court said, “was an
investment risk similar to the risk assumed
by a bank; it was not an insurance risk.”
Le Gierse, 312 U.S. at 542.
InTreganowan, the court held that a
program under which the surviving mem-
bers of the New York Stock Exchange paid
a certain sum to the families of deceased
members constituted insurance; the court
distinguished the holding ofLe Gierseas
follows:
The holding [ofLe Gierse] really high-
lights the situation here where the
payment is actually conditioned upon
death, whenever occurring, in the true
terms of insurance. “From an insur-
ance standpoint there is no risk unless
there is uncertainty, or, to use a better
term, fortuitousness. It may be uncer-
tain whether the risk will materialize in
any particular case. Even death may be
considered fortuitous, because the time
of its occurrence is beyond control.”
8 Ency.Soc.Sc. 95. That fortuitousness,
whether we speak of death generally
or premature death, as the Tax Court
wished to emphasize, seems perfectly
embodied here to fit both branches of
the Supreme Court’s test.
Treganowan, 183 F.2d at 290–91.See also
Allied Fidelity Corp., 572 F.2d at 1193
(“[T]he insurer undertakes no present duty
of performance but stands ready to assume
financial burden of any covered loss,” cit-
ing Couch on Insurance § 1:2 (1959)).
The Supreme Court has applied a simi-
lar standard to determine what constitutes
“the business of insurance” for purposes
of § 2(b) of the McCarran-Ferguson Act,
59 Stat. 34, as amended, 61 Stat. 448,
15 U.S.C. § 1012(b). InGroup Life &
Health Ins. Co. v. Royal Drug Co.,440
U.S. 205, 211 (1979), the Court concluded
that agreements between Blue Shield of
Texas and three pharmacies for the provi-
sion of prescription drugs to Blue Shield
policyholders did not constitute “the busi-
ness of insurance” within the meaning of
the McCarran-Ferguson Act, noting that
“[t]he primary elements of an insurance
contract are the spreading and underwrit-
ing of a policyholder’s risk.” The Court
considered the legislative history of the
Act, quoting approvingly from one of the
early House Reports, as follows: “‘The
theory of insurance is the distribution of
risk according to hazard, experience, and
the laws of averages. These factors are not
within the control of insuring companies in
the sense that the producer or manufacturer
may control cost factors.’”Group Life &
Health Ins. Co., 440 U.S. at 221 (quoting
H.R. Rep. No. 873, 78th Cong., 1st Sess.,
8–9 (1943)). Non-tax insurance treatises
further confirm that arrangements entered
into to manage losses that are at least sub-
stantially certain to occur, or that are not
the result of fortuitous events, do not con-
stitute insurance.See, e.g.,Couch on In-
surance, § 102:8 (losses that exist at the
time of the insuring agreement, or that are
so probable or imminent that there is in-
sufficient “risk” being transferred between
the insured and insurer, are not proper sub-
jects of insurance); 1Appleman on Insur-
ance 2d,§ 1.4 (“The fortuity principle is
central to the notion of what constitutes in-
surance. The insurer will not and should
not be asked to provide coverage for a loss
that is reasonably certain or expected to
occur within the policy period.”); 43 Am.
Jur. 2dInsurance, § 479 (2005).See also
Warren Freedman,Freedman’s Richards
on Insurance§1:2(6
th
ed. 1990) (insur-
ance is an aleatory contract);Restatement
(First) of Contracts§ 291 (1932) (aleatory
contract is one premised on happening of
fortuitous event; that time or amount of
performance depends on fortuitous event
does not mean contract is aleatory).
In Rev. Rul. 89–96, 1989–2 C.B. 114,
Y, a taxpayer that had already experienced
a catastrophic loss, entered into a “liabil-
ity insurance” contract withZ,anunre-
lated casualty insurance company. The ex-
act amount ofY’s liability to injured per-
sons as a result of the catastrophe could
not be ascertained, but was expected to be
substantially in excess of $130x. At the
time the catastrophe occurred,Y’s liabil-
ity insurance coverage totaled $30x. Un-
der the contract betweenYandZ,Ypaid
2007–30 I.R.B.128July 23, 2007

a premium of $50x in exchange for ad-
ditional “liability insurance” coverage of
$100x. That is,Zpromised to pay on be-
half ofYamounts in excess of $30x for
whichYwould become liable, subject to
the contract’s limit of $100x. The $50x
“premium” chargedYwas an amount that,
together withZ’s investment earnings and
tax savings, would yield at leastZ’s max-
imum anticipated liability of $100x by the
time claims were liquidated. The ruling
concludes that the arrangement does not
involve the requisite risk shifting neces-
sary for insurance, because the catastrophe
had already occurred and the economic
terms of the contract demonstrate the ab-
sence of any risk apart from an investment
risk (that is, the riskZwould be required
to pay out $100x earlier than anticipated,
or that actual investment yield would be
lower than forecast).
ANALYSIS
In order to determine the nature of an
arrangement for federal income tax pur-
poses, it is necessary to consider all the
facts and circumstances in a particular
case, including not only the terms of the
arrangement, but also the entire course
of conduct of the parties. Thus, an ar-
rangement that purports to be an insurance
contract but that lacks the requisite in-
surance risk, or fortuity, may instead be
characterized as a deposit arrangement,
a loan, a contribution to capital (to the
extent of net value, if any), an option or
indemnity contract, or otherwise, based on
the substance of the arrangement between
the parties. The proper characterization of
the arrangement may determine whether
the issuer qualifies as an insurance com-
pany and whether amounts paid under the
arrangement may be deductible.
In the present case, the requirement that
Xincur Future Costs attached at the time
Xbegan Business Process; no insurance
risk or hazard, such as a hurricane or an
accident, exists as to whetherXwill have
to incur those costs; it is certain thatIC
will have to perform under the arrange-
ment withXby reimbursingXfor the costs
incurred to perform the measures, subject
to the contract limit of $300x. Economi-
cally, the arrangement is a prefunding by
Xof its future obligations. AlthoughIC
assumed the risks of (i) the scope of the
required measures, (ii) projections of fu-
ture labor and material costs, (iii) the likely
time frame when Future Costs would be
incurred, and (iv) an appropriate discount
rate based on projections of future invest-
ment earnings, the overall risk assumed
byICwas whether the estimated present
value of the cost of performing the mea-
sures ($150x) would accrue to exceed the
greater ofX’s costs to perform the required
measures or the contract limit of $300x.
This risk is akin to the timing and invest-
ment risks that Rev. Rul. 89–96 concludes
are not insurance risks. Accordingly, the
arrangement betweenXandIClacks the
requisite insurance risk to constitute insur-
ance under the authorities set forth above.
HOLDING
The arrangement betweenXandIC
lacks the requisite insurance risk to consti-
tute insurance for purposes of determining
(i) whetherXmay deduct the amount paid
under the arrangement as an “insurance
premium” under § 162 of the Internal
Revenue Code, and (ii) whetherICmay
account for the arrangement as an “insur-
ance contract” for purposes of subchapter
L of the Code.
EFFECT ON OTHER DOCUMENTS
Rev. Rul. 89–96, 1989–2 C.B. 114, is
amplified.
REQUEST FOR COMMENTS
A revenue ruling represents the con-
clusion of the Internal Revenue Service
(IRS) on the application of the law to
the pivotal facts stated therein. Accord-
ingly, this revenue ruling does not apply
to reinsurance arrangements (including
retroactive reinsurance, such as loss port-
folio transfers), arrangements covering
unanticipated environmental exposures,
arrangements covering unanticipated cost
overruns, or arrangements involving prod-
uct warranties. The IRS may apply, or
not apply, the authorities cited in this
ruling to such arrangements, according
to the facts and circumstances presented
on a case-by-case basis. Comments are
requested concerning the need for guid-
ance in these and other areas. Comments
should be submitted by October 22, 2007.
Comments may be submitted by mail
addressed to: Internal Revenue Service,
CC:PA:LPD:PR (Rev. Rul. 2007–47),
P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044; by hand deliv-
ery (Monday through Friday between the
hours of 8:00 a.m. through 4:00 p.m.)
addressed to: Courier’s Desk, Internal
Revenue Service, Attn.: CC:PA:LPD:PR
(Rev. Rul. 2007–47), Room 5203, 1111
Constitution Avenue, NW, Washington,
DC 20224; or by email addressed to:
Notice.Comments@irscounsel.treas.gov.
Commentators should include the identi-
fication number of the publication (Rev.
Rul. 2007–47) in both the email subject
line and the body of the comment.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is John E. Glover of the Office of As-
sociate Chief Counsel (Financial Institu-
tions & Products). For further informa-
tion regarding this revenue ruling, con-
tact Mr. Glover at (202) 622–3970 (not a
toll-free call).
Section 402.—Taxability of
Beneficiary of Employees’
Trust
26 CFR 1.402(b)–1: Treatment of beneficiary of trust
not exempt under section 501(a).
(Also: §§ 83, 404, 409A, 661, 663, 671, 3101, 3102,
3111, 3121, 3301, 3306, 3401, 3402, 1.83–3, 1.83–8,
1.404(a)–12, 1.409A–1, 31.3102–1, 31.3121(a)–2,
31.3401(d)–1, 31.3402(a)–1.)
Nonexempt employees’ trusts.This
ruling considers the federal tax conse-
quences to the employees, the employer,
and the trust when an employer contributes
to a nonexempt employees’ trust on be-
half of highly compensated employees. It
also explains the effects of vesting of an
employee’s interest in the trust and distri-
butions from the trust. Rev. Rul. 74–299
amplified.
Rev. Rul. 2007–48
ISSUE
When an employer contributes to a
nonexempt employees’ trust on behalf
of highly compensated employees, what
are the Federal tax consequences to the
employees, the employer, and the trust
of contributions to the trust, vesting of
an employee’s interest in the trust, and
distributions from the trust?
July 23, 20071292007–30 I.R.B.

FACTS
Xcorporation has created a deferred
compensation plan (Plan) for 50 key ex-
ecutives (participants), all of whom are
highly compensated employees within the
meaning of § 414(q) of the Internal Rev-
enue Code. Pursuant to the Plan,Xcon-
tributes each year on behalf of each par-
ticipant to a trust,T. No contributions by
participants toTare required or permitted.
The Plan fails to satisfy the provisions of
§ 410(b) as well as other qualification re-
quirements of § 401(a). Therefore,Tis not
and never has been a qualified trust under
§ 401(a) and is not exempt from taxation
under § 501(a).
Twas established under state law as a
trust for the benefit of all of the Plan par-
ticipants.T’s assets can revert toXonly
after all liabilities to participants and ben-
eficiaries under the Plan have been satis-
fied.T’s assets are not subject to the claims
ofX’s creditors. Separate accounts that re-
flect the participant’s share of the net trust
assets and income are maintained for each
participant.Tis not a foreign trust within
the meaning of § 7701(a)(31).
A participant’s entire interest inTbe-
comes vested upon completion of two
years of service withXbeginning on the
date the individual first becomes a par-
ticipant in the Plan. Participants or their
beneficiaries are entitled to receive their
vested interest in the net assets ofT,net
of applicable withholding and other taxes,
on death, disability, or termination of em-
ployment. In addition,Tis required to
distribute to each participant each year
an amount that the trustee reasonably es-
timates will be equal to the amount of
Federal, state, and local income and em-
ployment taxes payable by the participant
with respect to the increase in the partici-
pant’s vested accrued benefit inTduring
such year.Tis permitted to make the dis-
tribution in part as adistribution of cash
to the participant, and in part in the form
of applicable employment tax withholding
under Federal, state, or local law.XandT
file income tax returns on a calendar year
basis.
On each of January 1, 2007, 2008,
2009, and 2010,Xcontributes $100,000 to
Ton behalf of participantAunder the Plan.
As of the close of business on December
31, 2008, the fair market value ofA’s
interest inTis $214,000, which includes
income and realized and unrealized gains
and losses onT’s assets.A’s interest inT
first becomes vested on January 1, 2009.
As of the close of business on January 1,
2009, the fair market value ofA’s interest
inTis $314,000 (including a contribution
of $100,000 fromXon that date).Afiles
income tax returns on a calendar year ba-
sis.
In 2009, the trustee distributes
$132,000 toA. Part of the distribution
is in the form of withholding of applicable
Federal, state, and local income and em-
ployment taxes and the remainder is cash.
T’s distributable net income allocable to
A’s account for 2009 is $15,000. The
fair market value ofA’s interest inTat
the end of 2009 (after the distribution) is
$198,000.
In 2010, the trustee distributes $48,000
toA. Again, part of the distribution is in the
form of withholding of applicable Federal,
state, and local income and employment
taxes and the remainder is cash.T’s dis-
tributable net income allocable toA’s ac-
count for 2010 is $16,000. The fair market
value ofA’s interest inTat the end of 2010
(after the distribution) is $270,000.
LAW AND ANALYSIS
Income Tax Treatment
For Participant
Section 83(a) provides that the excess
(ifany)ofthefairmarketvalueofprop-
erty transferred in connection with the per-
formance of services over the amount (if
any) paid for the property is includible in
the gross income of the person who per-
formed the services for the first taxable
year in which the property becomes trans-
ferable or is not subject to a substantial risk
of forfeiture.
Section 1.83–8(a) of the Income Tax
Regulations provides generally that § 83
applies to a transfer to or from a trust for
the benefit of employees, independent con-
tractors, or their beneficiaries if the trust is
not described in § 401(a). To the extent
such a transfer is subject to § 402(b), how-
ever, § 83 applies to the transfer only as
provided for in § 402(b).
Section 402(b)(1) provides that em-
ployer contributions to an employees’
trust not exempt from tax under § 501(a)
(a nonexempt employees’ trust) are in-
cluded in the employee’s gross income
in accordance with § 83, except that the
value of the employee’s interest in the
trust is substituted for the property’s fair
market value in applying § 83. Section
1.402(b)–1(a)(1) provides that employer
contributions to a nonexempt employees’
trust are included as compensation in the
employee’s gross income for the taxable
year in which the contribution is made,
but only to the extent that the employee’s
interest in the contribution is substantially
vested. BecauseTis a nonexempt employ-
ees’ trust whose assets are derived solely
from employer contributions, the entire
trust is treated as a nonexempt employees’
trust subject to the provisions of § 402(b).
Section 402(b)(2) provides that the
amount actually distributed or made avail-
able to an employee by a nonexempt
employees’ trust shall be taxable in the
taxable year in which distributed or made
available to the employee under § 72
(relating to annuities), except that dis-
tributions of income of the trust before
the annuity starting date (as defined in
§ 72(c)(4)) shall be included in the em-
ployee’s gross income without regard to
§ 72(e)(5) (relating to amounts not re-
ceived as annuities).
Section 402(b)(4)(A) provides that if
one of the reasons a trust is not exempt
from tax under § 501(a) is the failure of
the plan of which it is a part to meet the
requirements of § 401(a)(26) or § 410(b),
then a highly compensated employee (as
defined in § 414(q)) shall, in lieu of the
amount determined under § 402(b)(1) or
(2), include in gross income for the tax-
able year with or within which the taxable
year of the trust ends an amount equal to
the vested accrued benefit of the employee
(other than the employee’s investment in
the contract) as of the close of the taxable
year of the trust.
Section 409A generally provides that
unless certain requirements are met,
amounts deferred under a nonqualified
deferred compensation plan for all taxable
years are currently includible in gross in-
come to the extent not subject to a substan-
tial risk of forfeiture. Section 409A also
includes rules applicable to certain trusts
or similar arrangements associated with a
nonqualified deferred compensation plan,
where such arrangements are located out-
side of the United States or are restricted
to the provision of benefits in connection
with a decline in the financial health of
2007–30 I.R.B.130July 23, 2007

the sponsor. Under § 1.409A–1(b)(6)(i), a
right to compensation income that will be
required to be included in income under
§ 402(b)(4) is not a deferral of compen-
sation for purposes of § 409A. Although
the regulations under § 409A generally
apply for taxable years beginning on or
after January 1, 2008, taxpayers may rely
on such regulations for taxable years be-
ginning before January 1, 2008.
Because the Plan does not meet the
requirements of § 410(b) andAis a highly
compensated employee (as defined in
§ 414(q)), § 402(b)(4)(A) determines the
tax consequences toAofA’s interest inT.
BecauseAhas no vested accrued benefit in
Tin 2007 or 2008,Ahas no gross income
on account ofA’s interest inTfor those
years. See § 1.83–3(c)(4), Example (1).
For 2009, pursuant to § 402(b)(4)(A),
Amust include in gross income as com-
pensation $330,000, which isA’s vested
accrued benefit (the $198,000 fair market
value ofA’s account inTas of the end
of 2009, plus the $132,000 distributed to
Ain 2009 to satisfy applicable withhold-
ing requirements andA’s anticipated tax
liability for 2009, lessA’s investment in
the contract as of the end of 2008, which
was zero). For 2010,Amust include in
gross income as compensation $120,000,
which isA’s vested accrued benefit under
§ 402(b)(4)(A) (the $48,000 distributed to
Ain 2010 to satisfy applicable withholding
requirements andA’s anticipated tax liabil-
ity for 2010, plus the $270,000 fair market
value ofA’s interest inTat the end of the
taxable year ofT,lessA’s investment in the
contract as of the end of 2009, which was
$198,000).
For Employer
Section 404(a) provides the general de-
duction timing rules applicable to any plan
or arrangement for the deferral of com-
pensation, regardless of the Code section
under which the amounts might otherwise
be deductible. Pursuant to § 404(a)(5),
contributions paid by an employer to
or under a deferred compensation plan
or arrangement that is not included in
§ 404(a)(1), (2), or (3) (a nonqualified
plan) are deductible in the taxable year in
which amounts attributable to the contri-
butions are includible in the gross income
of the employees participating in the plan
or arrangement, provided that the contri-
butions otherwise meet the requirements
for deductibility. In the case of a non-
qualified plan in which more than one
employee participates, contributions are
deductible only if separate accounts are
maintained for each employee.
Section 1.404(a)–12(b)(3) provides
that in the case of a funded nonqualified
plan under which more than one employee
participates, no deduction is allowable
under § 404(a)(5) for any contribution
unless separate accounts are maintained
for each employee. The requirement of
separate accounts does not require that a
separate trust be maintained for each em-
ployee. However, a separate account must
be maintained for each employee to which
employer contributions under the plan are
allocated, along with any income earned
thereon. In addition, the accounts must be
sufficiently separate and independent to
qualify as separate shares under § 663(c).
The separate account requirement does
not barXfrom deducting contributions to
TbecauseTsatisfies the separate account
requirement. However, becauseAdoes not
include in income any amount attributable
toX’s contributions toTon behalf ofAun-
til 2009, none of those contributions is de-
ductible byXbefore 2009. For 2009, be-
cause
Aincludes in that year all amounts
attributable to the $100,000 contributions
made byXin each of 2007, 2008, and
2009,Xmay deduct $300,000 for contri-
butions toTmade on behalf ofA, assum-
ing such contributions are otherwise de-
ductible. For 2010, becauseAincludes
in that year all amounts attributable to the
$100,000 contribution made in the year,X
may deduct $100,000 for contributions to
Tmade on behalf ofA, assuming such con-
tributions are otherwise deductible.
For Trust
Section 671 provides that where a
grantor is treated as the owner of any por-
tion of a trust under subpart E of part I of
subchapter J of chapter 1 (subpart E), there
are included in computing the grantor’s
taxable income and credits those items of
income, deductions, and credits against
tax of the trust that are attributable to
that portion of the trust (to the extent that
those items could be taken into account in
computing the taxable income or credits
against the tax of an individual). Sections
673 through 678 specify the circumstances
that cause a taxpayer to be regarded as the
owner of a portion of a trust. However, the
rules of §§ 402(b) and 404(a)(5) preclude
a § 402(b) employees’ trust from being
treated as owned by the employer under
subpart E.
Section 641(a) provides that the tax im-
posed by § 1(e) applies to the taxable in-
comeofanykindofpropertyheldintrust.
Section 661(a) provides that in comput-
ing the taxable income of an estate or trust
a deduction is allowed for distributions
to beneficiaries equal to the sum of the
amount of income for the taxable year that
is required to be distributed currently and
any other amounts properly paid or cred-
ited or required to be distributed for the
taxable year. However, the total amount
deductible under § 661(a) cannot exceed
the distributable net income as computed
under the provisions of § 643(a).
Section 663(c) provides that for the sole
purpose of determining the amount of dis-
tributable net income in the application of
§ 661, in the case of a single trust having
more than one beneficiary, substantially
separate and independent shares of differ-
ent beneficiaries in the trust are treated as
separate trusts.
Rev. Rul. 74–299, 1974–1 C.B. 154,
holds that a nonexempt employees’ trust is
allowed a deduction under § 661(a) for dis-
tributions to a retired employee under a de-
ferred compensationplan. Where the sep-
arate share rule of § 663 applies to the trust,
the trust’s deduction under § 661(a) is lim-
ited to the distributee’s separate share of
the trust’s distributable net income. The
taxation of the distributions is not gov-
erned by the provisions of § 662.
In the present case,Tis taxed as a
trust under § 641.T’s deduction under
§ 661(a) is limited to $15,000 for 2009
and $16,000 for 2010 because in each of
those years the distributed amount (includ-
ing the amount used to satisfy withholding
requirements and distributed toAto sat-
isfyA’s anticipated tax liability) exceeds
T’s distributable netincome allocable to
A’s separate share inTfor those years.
Employment Tax Treatment
Sections 3101 and 3111 impose Fed-
eral Insurance Contributions Act (FICA)
taxes on “wages,” as that term is defined
in § 3121(a). FICA taxes consist of the
Old-Age, Survivors and Disability Insur-
ance tax (social security tax) and the Hos-
pital Insurance tax (Medicare tax). These
taxes are imposed both on the employer
under § 3111(a) and (b) and on the em-
July 23, 20071312007–30 I.R.B.

ployee under § 3101(a) and (b). Section
3102(a) provides that the employee por-
tion of FICA tax must be collected by
the employer of the taxpayer by deduct-
ing the amount of the tax from the wages
as and when paid. Section 31.3102–1(a)
of the Employment Tax Regulations pro-
vides that the employer is required to col-
lect the tax, notwithstanding that wages
are paid in something other than money.
Section 3121(a) defines “wages” for FICA
purposes as all remuneration for employ-
ment including the cash value of all remu-
neration (including benefits) paid in any
medium other than cash, with certain spe-
cific exceptions. Section 31.3121(a)–2(a)
provides that “[w]ages are paid by an em-
ployer at the time that they are actually
or constructively paid” unless certain ex-
ceptions not relevant here apply. Section
3121(b) defines “employment” for FICA
purposes as any service, of whatever na-
ture, performed by an employee for the
person employing him, with certain spe-
cific exceptions.
Rules similar to the FICA rules ap-
ply with respect to Federal Unemploy-
ment Tax Act (FUTA) tax under §§ 3301,
3306(b), and 3306(c).
Section 3402(a), relating to Federal in-
come tax withholding, generally requires
every employer making a payment of
wages to deduct and withhold upon these
wages a tax determined in accordance with
prescribed tables or computational proce-
dures. Section 31.3402(a)–1(b) provides
that the employer is required to collect
Federal income tax withholding by deduct-
ing and withholding the amount thereof
from the employee’s wages as and when
paid, either actually or constructively.
Under § 31.3402(a)–1(c), an employer is
required to deduct and withhold income
tax notwithstandingthat the wages are
paid in something other than money (for
example, wages paid in stock or bonds)
andtopayoverthetaxinmoney.Section
3401(a) provides that “wages” for Federal
income tax withholding purposes means
all remuneration for services performed
by an employee for his employer, includ-
ing the cash value of all remuneration
(including benefits) paid in any medium
other than cash, with certain specific ex-
ceptions.
Section 31(a)(2) provides that an
amount of Federal income tax withheld
during a calendar year from wages is al-
lowed as a credit against income tax for
the taxable year of the employee begin-
ning in such calendar year.
Under section 6672(a), any person re-
quired to collect, truthfully account for,
and pay over any internal revenue tax who
willfully fails to collect such tax, or truth-
fully account for and pay over such tax, or
willfully attempts in any manner to evade
or defeat such tax or the payment thereof,
shall, in addition to other penalties, be li-
able for a penalty equal to the total amount
of the tax evaded, or not collected, or not
accounted for and paid over. A trustee
can be liable for unpaid employment and
withholding taxes.SeeRev. Rul. 84–83,
1984–1 C.B. 264.
Rev. Rul. 67–351, 1967–2 C.B. 86,
concludes that certain contributions to an
employees’ trust are subject to employ-
ment taxes at the time of contribution. In
Rev. Rul. 67–351, pursuant to a collec-
tive bargaining agreement between a union
andagroupofemployers,avacationplan
and trust are established for the benefit of
the employees. The agreement provides
that the employers will pay into the trust
a specified amount for each hour worked
by qualified employees. An individual ac-
count is established for each qualified em-
ployee by the trustees of the trust. The in-
dividual employee’s interest in the amount
in his vacation account is fully vested and
nonforfeitable from the time the money is
paid by his employer. The ruling con-
cludes that the contributions to the trust are
includible in gross income at the time they
are contributed to the trust. Furthermore,
the ruling holds that the contributions to
the trust are payments of wages for pur-
poses of the FICA, the FUTA, and Federal
income tax withholding at the time they are
contributed to the trust.
In Rev. Rul. 79–305, 1979–2 C.B.
350, a corporation transfers to an employee
common stock subject to a substantial risk
of forfeiture. The ruling holds that, under
§ 83, the fair market value of the stock at
the time the substantial risk of forfeiture
lapses is includible in the employee’s gross
income for the year in which the substan-
tial risk of forfeiture lapses. The ruling
also holds that the employee has received
a payment of wages for purposes of the
FICA, the FUTA, and Federal income tax
withholding at the time the substantial risk
of forfeiture lapses equal to the fair market
value of the stock.
Section 3401(d)(1) provides that if the
person for whom the individual performs
services does not have control of the pay-
ment of the wages for such services, the
term “employer” means the person hav-
ing control of the payment of such wages.
Section 3401(d)(1) applies as well to the
employer and employee portions of FICA
tax, and to FUTA tax. SeeOtte v. United
States, 419 U.S. 43 (1974);In re Armadillo
Corp., 561 F.2d 1382 (10
th
Cir. 1977); and
Lane Processing Trust v. United States,
25 F.3d 662 (8
th
Cir. 1994). Section
31.3401(d)–1(f) clarifies that § 3401(d)(1)
applies if the person for whom the individ-
ual performs the services does not have le-
gal control of the payment of wages. The
regulation provides as an example the pay-
ment of pensions or retired pay by a trust.
For FICA and FUTA purposes, con-
tributions to a nonexempt employees’
trust are taken into account as wages
only once, either at the time of contribu-
tion or the time of vesting. Treas. Reg.
§§ 31.3121(a)–2(a) & 31.3102–1(a). Em-
ployer contributions to such a trust are
wages at the time of contribution to the
extent that the employee’s interest in the
amount contributed is vested at the time of
contribution. To the extent the employee’s
interest is not vested at the time of contri-
bution, the contributions are not wages at
the time contributed. Rather, for FICA and
FUTA tax purposes, the employee receives
a payment of wages on the date of vesting
in an amount equal to the fair market value
of the employee’s interest in the trust at-
tributable to the amount contributed (i.e.,
the amount contributed plus any increase
in the value of the trust with respect to the
contributions or less any decrease in the
value of the trust with respect to the contri-
butions up to the date of vesting). Because
neitherX’s contributions norA’s interest
inTare vested during 2007 or 2008,A
has no vested accrued benefit for 2007
or 2008. Therefore,Adoes not receive a
payment of wages for FICA and FUTA
tax purposes for these years. Because
X’s contributions of $100,000 on each of
January 1, 2009, and January 1, 2010, are
vested at the time they were made, those
contributions are treated as payments of
wages subject to FICA and FUTA taxes
at the time of contribution.Xis the em-
ployer responsible for FICA and FUTA
taxes on the 2009 and 2010 contributions.
Furthermore, whenA’s interest inTvests
2007–30 I.R.B.132July 23, 2007

on January 1, 2009,Areceives a payment
of wages on that date for FICA and FUTA
tax purposes in the amount ofA’s vested
accrued interest on that date,i.e.,thefair
market value ofA’s interest inTthat is
attributable to the contributions made in
2007 and 2008 (not including the amount
contributed byXon January 1, 2009, on
which FICA and FUTA taxes are owed by
X).Tis the employer under § 3401(d)(1)
for FICA and FUTA tax purposes with
respect to the amount attributable to the
contributions made in 2007 and 2008. In
applying the annual social security tax and
FUTA wage bases under §§ 3121(a)(1)
and 3306(b)(1), all of the wages paid dur-
ing 2009 in connection withA’s interest
inTare taken into account, including the
wages attributable to contributions made
in 2007 and 2008.
The rule for determining the amount
and the timing of the payment of wages
subject to Federal income tax withholding
follows the rule in § 402(b)(4)(A) for de-
termining the amount and timing of gross
income received byA, rather than the rule
for determining the amount and the tim-
ing of the payment of wages for FICA and
FUTA purposes. The legislative history
of §§ 3401 through 3404 indicates that an
objective of Federalincome tax withhold-
ing is to enable individuals to pay the cor-
rect amount of income tax. H.R. Conf.
Rep. No. 78–510 at 1 (1943). Con-
gress has also stated that because the so-
cial security system has objectives that are
significantly different from the objectives
underlying the Federal income tax with-
holding rules, an amount may be treated
differently for FICA purposes than it is
for Federal income tax withholding pur-
poses. See the legislative history to the
Social Security Amendments of 1983 at
S. Rep. No. 98–23, 42 (1983). Align-
ing the rule for Federal income tax with-
holding with the rule for determining the
amount and timing of compensation in-
cluded in the employee’s gross income
will result in the amount of Federal income
tax withheld more precisely approximat-
ing the employee’s income tax liability. A
rule that determined wages for income tax
withholding purposes at the time of vest-
ing rather than at the end of the trust’s tax-
able year could result in either overwith-
holding or underwithholding. Thus, in or-
der to apply §§ 3401(a) and 3402(a) con-
sistent with their purpose, the wages of a
highly compensated employee (within the
meaning of § 414(q)) with a vested ac-
crued benefit in a nonexempt employees’
trust are treated as paid for Federal income
tax withholding purposes on the last day
of the taxable year of the trust. The em-
ployer does not make a payment of wages
for income tax withholding purposes at the
time it makes contributions to such a trust
even if the contributions are vested at the
time of contribution. The nonexempt em-
ployees’ trust is the employer within the
meaning of § 3401(d)(1) for Federal in-
come tax withholding purposes and is re-
sponsible for all Federal income tax with-
holding obligations with respect to wages
that are also gross income determined un-
der § 402(b)(4)(A).
In accordance with the foregoing,A’s
wages for FICA and FUTA purposes at-
tributable to contributions made in 2007
and 2008 are treated as paid on January
1, 2009, the date on whichA’s interest
vests, in an amount equal to $214,000,
which is the fair market value ofA’s inter-
est inTon January 1, 2009, disregarding
the $100,000 contribution fromXon that
date.A’s wages for FICA and FUTA pur-
poses for 2009 and 2010 are treated as paid
on January 1, 2009 and January 1, 2010,
and for each year are in an amount equal
toX’s vested contribution of $100,000 on
each such date.A’s wages for Federal
income tax withholding purposes attribut-
able to contributions made in 2007, 2008,
and 2009 are treated as paid on December
31, 2009, in an amount equal to $330,000,
which is the excess on that date ofA’s
vested accrued benefit inToverA’s invest-
ment in the contract.A’s wages for Federal
income tax withholding purposes for 2010
are treated as paid on December 31, 2010,
in an amount equal to $120,000, which is
the excess on that date ofA’s vested ac-
crued benefit inToverA’s investment in
the contract.
Xis the employer for FICA and FUTA
purposes with respect toA’s wages result-
ing fromX’s vested contributions toTin
2009 and 2010.Tis the employer within
the meaning of § 3401(d)(1) for FICA and
FUTA purposes with respect toA’s wages
attributable to the contributions made in
2007 and 2008.
T
is the employer within the meaning of
§ 3401(d)(1) for Federal income tax with-
holding purposes for all years with respect
toA’s wages resulting fromA’s interest
inT.Thus,Tis liable for Federal income
tax withholding on $330,000 in wages paid
toAfor 2009, andTis liable for Fed-
eral income tax withholding on $120,000
in wages paid toAfor 2010.Xis not liable
for any Federal income tax withholding in
connection with the contributions toT.
HOLDING
Income and Deductions.Whenan
employer contributes to a nonexempt em-
ployees’ trust on behalf of highly compen-
sated employee participants, a participant
includes in gross income as compensation
under § 402(b)(4)(A) the participant’s
vested accrued benefit (other than the par-
ticipant’s investment in the contract) as
of the end of the taxable year of the trust
ending with or within the taxable year of
the participant. Provided that the separate
account rule of § 404(a)(5) is satisfied,
the employer is entitled to deduct a con-
tribution made to the trust on behalf of a
participant in the taxable year in which
amounts attributable to the contribution
are includible in the participant’s income,
to the extent the contribution otherwise
meets the requirements for deductibility.
The trust is taxed as a trust under § 641.
Because the separate share rule of § 663(c)
applies to the trust, the trust is entitled to
deduct distributions made to a participant
to the extent the distributions do not ex-
ceed the distributable net income allocable
to the participant’s separate share of the
trust.
FICA and FUTA. When an employer
contributes to a nonexempt employees’
trust on behalf of a highly compensated
employee, the FICA and FUTA taxation
of such contributions depends on whether
the employee’s interest in the contribution
is vested at the time of contribution. If the
contribution is vested at the time of contri-
bution, then the amount of the contribution
is subject to FICA and FUTA taxes at the
time of contribution. The employer is
liable for the payment of FICA and FUTA
taxes on such amounts. If the contribution
is not vested at the time of contribution,
then the amount of the contribution and
the earnings thereon are subject to FICA
and FUTA taxation at the time of vesting.
With respect to contributions and earnings
thereon that become vested after the date
of contribution, the nonexempt employ-
ees’ trust is considered the employer under
July 23, 20071332007–30 I.R.B.

§ 3401(d)(1) with respect to such amounts
as they become vested.
Income Tax Withholding.Withre-
spect to an employee described in
§ 402(b)(4)(C), whose gross income is de-
termined under § 402(b)(4)(A), wages for
Federal income tax withholding purposes
are determined in the same way gross in-
come is determined under § 402(b)(4)(A).
Such wages are in the amount of the em-
ployee’s vested accrued benefit (other
than the employee’s investment in the
contract) on the last day of the taxable
year of the nonexempt employees’ trust
and are treated as paid for Federal income
tax withholding purposes on that same
date. The nonexempt employees’ trust
is the employer within the meaning of
§ 3401(d)(1) with respect to the highly
compensated employee whose gross in-
come is determined under § 402(b)(4)(A),
regardless of whether contributions made
for the benefit of the employee are vested
at the time of contribution. Thus, the em-
ployees’ trust is responsible for all Federal
income tax withholding with respect to
such wages paid to the employee. Distri-
butions of benefits from the nonexempt
employees’ trust to the employee or for
the employee’s benefit are included in de-
termining the vested accrued benefit of the
employee at the end of the trust’s taxable
year, which is subject to Federal income
tax withholding at the end of the trust’s
taxable year.
EFFECT ON OTHER REVENUE
RULING
Rev. Rul. 74–299 is amplified.
DRAFTING INFORMATION
The principal authors of this rev-
enue ruling are William C. Schmidt and
Alfred G. Kelley of the Office of Division
Counsel/Associate Chief Counsel (Tax
Exempt and Government Entities). For
further information regarding this rev-
enue ruling, contact Mr. Schmidt at (202)
622–6030 (not a toll-free call), Mr. Kelley
at (202) 622–6040 (not a toll-free call), or
Bradford R. Poston of the Office of As-
sociate Chief Counsel (Passthroughs and
Special Industries) at (202) 622–3060 (not
a toll-free call).
Section 404.—Deduction
for Contributions of an
Employer to an Employees’
Trust or Annuity Plan and
Compensation Under a
Deferred-Payment Plan
A revenue ruling provides guidance concerning
the deduction of contributions to a nonexempt em-
ployees’ trust. See Rev. Rul. 2007-48, page 129.
Section 461.—General
Rule for Taxable Year
of Deduction
26 CFR 1.461–4: Economic performance.
A revenue ruling that holds that an arrangement
that provides for the reimbursement of believed-to-be
inevitable future cost does not involve the requisite
insurance risk for purposes of determining (i) whether
the amount paid for the arrangement is deductible as
an insurance premium and (ii) whether the assuming
entity may account for the arrangement as an ‘insur-
ance contract’ for purposes of subchapter L of the
Code. Stakeholders are asked to comment on the ap-
plication of the rationale of the revenue ruling outside
of its facts. See Rev. Rul. 2007-47, page 127.
Section 501.—Exemption
From Tax on Corporations,
Certain Trusts, etc.
This revenue procedure sets forth procedures for
issuing determination letters and rulings on the ex-
empt status of organizations under sections 501 and
521 of the Internal Revenue Code. These procedures
alsoapplytorevocationandmodificationofdetermi-
nation letters or rulings, and provides guidance on the
exhaustion of administrative remedies for purposes of
declaratory judgment under section 7428 of the Code.
See Rev. Proc. 2007-52, page 222.
Section 661.—Deduction
for Estates and Trusts
Accumulating Income or
Distributing Corpus
A revenue ruling provides guidance concerning
the deduction of distributions from a nonexempt em-
ployees’ trust. See Rev. Rul. 2007-48, page 129.
Section 831.—Tax on
Insurance Companies
Other Than Life Insurance
Companies
26 CFR 1.831–3: Tax on insurance companies (other
than life or mutual), mutual marine insurance compa-
nies, mutual fire insurance companies issuing perpet-
ual policies, and mutual fire and flood insurance com-
panies operating on the basis of premium deposits;
taxable years beginning after December 31, 1962.
A revenue ruling that holds that an arrangement
that provides for the reimbursement of believed-to-be
inevitable future cost does not involve the requisite
insurance risk for purposes of determining (i) whether
the amount paid for the arrangement is deductible as
an insurance premium and (ii) whether the assuming
entity may account for the arrangement as an ‘insur-
ance contract’ for purposes of subchapter L of the
Code. Stakeholders are asked to comment on the ap-
plication of the rationale of the revenue ruling outside
of its facts. See Rev. Rul. 2007-47, page 127.
Section 3121.—Definitions
A revenue ruling provides guidance concerning
when amounts contributed to a nonexempt employ-
ees’ trust constitute wages. See Rev. Rul. 2007-48,
page 129.
Section 3306.—Definitions
A revenue ruling provides guidance concerning
when amounts contributed to a nonexempt employ-
ees’ trust constitute wages. See Rev. Rul. 2007-48,
page 129.
Section 3402.—Income Tax
Collected at Source
A revenue ruling provides guidance concerning in-
come tax withholding with respect to amounts in-
cluded in the income of a participant in a nonex-
empt employees’ trust and concerning who is the em-
ployer for employment tax purposes. See Rev. Rul.
2007-48, page 129.
2007–30 I.R.B.134July 23, 2007

Part III. Administrative, Procedural, and Miscellaneous
Qualified Payment Card Agent
Determination
Notice 2007–59
This notice provides a proposed rev-
enue procedure that would supersede Rev.
Proc. 2004–42, 2004–2 C.B. 121 (August
2, 2004). In general, Rev. Proc. 2004–42,
establishes a procedure for a payment card
organization to request a determination
that it is a Qualified Payment Card Agent
(QPCA) for purposes of the regulations
under section 3406 and section 6724 of the
Internal Revenue Code. A QPCA may act
on behalf of cardholder/payors in solicit-
ing, collecting, and validating merchants’
names, taxpayer identification numbers
(TINs) and corporate status (collectively
referred to as merchant/payee data) and on
behalf of merchant/payees in furnishing
merchant/payee data to cardholder/payors.
Under section 301.6724–1(c) and (e) of
the Regulations on Procedure and Admin-
istration, cardholder/payors are relieved
of certain TIN solicitation requirements
for payments made through a QPCA.
Section 31.3406(g)–1(f) of the Employ-
ment Tax Regulations provides a limited
exception from the backup withholding
requirements for payments made to cer-
tain merchant/payees through a QPCA.
In response to the request in Notice
2005–25, 2005–1 C.B. 827 (April 4,
2005), for recommendations of publi-
cation items for the 2005–2006 Guidance
Priority List, some businesses subject to
the payment card rules and procedures rec-
ommended that Rev. Proc. 2004–42 and
section 31.3406(g)–1(f) of the regulations
be modified to reflect the current elec-
tronic business operations of the payment
card industry and to permit the use of pay-
ment cards by merchant/payees that opt
out of the QPCA program. Specifically,
they requested the following changes to
the procedures in Rev. Proc. 2004–42:
1. Modification of the requirements in
section 5.03(1)(b) and (c) of Rev.
Proc. 2004–42 (relating to the written
notices that payment card organiza-
tions are required to provide to mer-
chant/payees and cardholder/payors
when obtaining authorizations to act
on their behalf) to permit payment
card organizationsto furnish the no-
tices electronically.
2. Further modification of the require-
ments in section 5.03(1)(b) and (c) to
allow payment card organizations to
include the notification of important
tax information either on the outside
of the envelope containing the writ-
ten notices or on the subject line of
the electronic communication through
which the notice is furnished.
3. Modification of the requirements
in section 6.04 (relating to mer-
chant/payee data reports) to provide
specific authority for furnishing the
merchant/payee data report electroni-
cally, including by posting on a secure
website.
4. Modification of the content of the
written notice required by section
5.03(1)(c) (relating to the notice that
payment card organizations are re-
quired to provide to merchant/payees)
to eliminate the requirement that the
notice inform merchant/payees that
they will be treated as participants in
the QPCA program if they continue
to accept the organization’s payment
card. Instead, require that the no-
tice inform merchant/payees that they
may opt out of the QPCA program
by completing and returning a written
statement to the payment card organ-
ization and that they may continue
to accept the organization’s payment
card even if they opt out of the QPCA
program.
The Service and Treasury Department
agree that it is appropriate to modify the
requirements of Rev. Proc. 2004–42 and
the regulations to reflect the current elec-
tronic business operations of the payment
card industry. Proposed amendments to
the regulations under section 3406 would
authorize electronic furnishing of notifica-
tions regarding payee status and participa-
tion in the QPCA program if certain con-
ditions are satisfied. In addition, the pro-
posed revenue procedure set forth as an
attachment to this notice would adopt the
first and second recommendations regard-
ing the electronic furnishing of notices.
The proposed revenue procedure also re-
sponds to the third recommendation by au-
thorizing the electronic furnishing of mer-
chant/payee data reports if both the card-
holder/payor and the merchant/payee con-
sent.
The Service and the Treasury Depart-
ment also agree that amerchant/payee that
does not want to participate in the QPCA
program should be allowed to opt out of
the program by completing and returning
a written statement to the payment card or-
ganization and should be permitted to con-
tinue accepting the payment card even if it
opts out of the QPCA program. The pro-
posed revenue procedure would make this
change.
Although QPCAs would not act on
behalf of nonparticipating payees in fur-
nishing payee data to cardholders, the
Service and the Treasury Department have
concluded that a QPCA should be required
to furnish certain information to cardhold-
ers that use the QPCA’s card to make
reportable payments to nonparticipating
payees. Specifically, the QPCA should
be required to inform the cardholder that
the payee is not a participant in the QPCA
program and is not a qualified payee. Pro-
posed amendments to the regulations un-
der section 3406 would adopt this rule. In
addition, the proposed revenue procedure
would change the content of the written
notice that payment card organizations are
required to provide to merchant/payees
so that the content is consistent with the
proposed regulations relating to payees
that opt out of the QPCA program.
The Service requests comments on the
proposed revenue procedure. Written
comments must be received by September
24, 2007. Comments should be submitted
to: CC:PA:LPD:PR (NOT–2007–59),
Room 5203, Internal Revenue Service,
POB 7604, Ben Franklin Station,
Washington, DC 20044. Alternatively,
comments may be hand delivered
between the hours of 8 am and 4 pm
to CC:PA:LPD:PR (NOT–2007–59),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Ave., NW,
Washington, DC. Comments may
also be transmitted electronically
via the following email address:
Notice.Commments@irscounsel.treas.gov.
July 23, 20071352007–30 I.R.B.

Please include “Notice 2007–59” in
the subject line of any electronic
communication.
For further information regarding this
notice, contact Michael Hara of the Of-
fice of Associate Chief Counsel (Proce-
dure and Administration). Mr. Hara may
be contacted at (202) 622–4910 (not a toll-
free call).
APPENDIX
(PROPOSED REVENUE
PROCEDURE)
SECTION1.INGENERAL
This revenue procedure modifies
the procedures set forth in Rev. Proc.
2004–42, 2004–2 C.B. 121 (August 2,
2004). Rev. Proc. 2004–42 established
a procedure for a payment card organiza-
tion to request a determination that it is a
Qualified Payment Card Agent (QPCA)
for purposes of the regulations under sec-
tion 3406 and section 6724 of the Internal
Revenue Code (Code). A QPCA may act
on behalf of cardholder/payors in solicit-
ing, collecting, and validating merchants’
names, taxpayer identification numbers
(TINs) and corporate status (collectively
referred to as merchant/payee data) and on
behalf of merchant/payees in furnishing
merchant/payee datato cardholder/pay-
ors. The Regulations on Procedure and
Administration relieve cardholder/payors
from certain TIN solicitation requirements
for payments made through a QPCA.
The Employment Tax Regulations pro-
vide a limited exception from the backup
withholding requirements for payments
made to certain merchant/payees through
aQPCA.
SECTION 2. SIGNIFICANT CHANGES
The requirements a payment card or-
ganization must meet to obtain and retain a
QPCA determination are modified as fol-
lows:
.01 The written notices that the payment
card organization must provide to card-
holder/payors and merchant/payees may
be mailed (the only option described in
Rev. Proc. 2004–42) or furnished elec-
tronically. If a notice is furnished elec-
tronically, a notification that important tax
and privacy information is being provided
must be included on the subject line of the
electronic communication through which
the notice is furnished.
.02 The written notices provided to mer-
chant/payees will no longer be required to
inform merchant/payees that they will be
treated as participants in the QPCA pro-
gram if they continue to accept the or-
ganization’s payment card. Instead, the
notice must inform merchant/payees that
they may opt out of the QPCA program by
completing and returning a written state-
ment to the payment card organization and
that they may continue to accept the organ-
ization’s payment card even if they opt out
of the QPCA program.
.03 The reporting requirements are
modified to reflect the fact that a QPCA’s
payment card may be accepted by mer-
chant/payees that have opted out of the
QPCA program (nonparticipating mer-
chant/payees). Although QPCAs do not
act on behalf of nonparticipating payees
in furnishing payee data to cardholders,
the QPCA is required to furnish certain
information to cardholders that use the
QPCA’s card to make reportable payments
to nonparticipating payees. Specifically,
the QPCA is required to inform the card-
holder that the payee is not a participant
in the QPCA program and is not a quali-
fied payee. In addition, the QPCA must
advise the cardholder/payor of the card-
holder/payor’s obligation to solicit the
name and TIN of a nonparticipating mer-
chant/payee to which it makes a reportable
payment.
.04 The reporting requirements are also
modified to provide specific authority for
furnishing the merchant/payee data report
electronically, including by posting on a
secure website. Electronic reporting is per-
mitted only if both the cardholder/payor
and merchant/payee consent by returning
the consent form included with the written
notice provided by the QPCA.
SECTION 3 . BACKGROUND
.01Payment card transactions.Apay-
ment card transaction is a transaction in
which a cardholder/payor uses a payment
card (as defined in section 5.05 of this rev-
enue procedure) to purchase goods or ser-
vices and a merchant agrees to accept the
payment card as a means of obtaining pay-
ment. A payment card organization (as de-
fined in section 5.06 of this revenue proce-
dure) sets the standards and provides the
mechanism for effecting the payment.
.02Reporting requirements. In general,
section 6041 of the Code requires a person
engaged in a trade or business and mak-
ing a payment in the course of the trade or
business of $600 or more during a calen-
dar year of fixed or determinable income to
file an information return with the Internal
Revenue Service (IRS) and to furnish an
information statement to the payee. Sec-
tion 1.6041–3(p) of the Income Tax Reg-
ulations provides exceptions to these re-
quirements, including, for example, ex-
ceptions for payments made to a payee that
is a corporation. Section 6041A of the
Code imposes similar requirements with
respect to payments of remuneration for
services and direct sales.
Section 6109(a)(2) of the Code pro-
vides that any payee, with respect to
whom a return is required to be made by
another person or whose identifying num-
ber is required to be shown on a return of
another person, must furnish to the other
person the identifying number prescribed
for securing the proper identification of
the payee. Section 6109(a)(3) provides
that any person required to make a return
with respect to a payee must ask the payee
for the identifying number prescribed for
securing the proper identification of the
payee and must include that number in the
return.
.03Backup withholding. Section
3406(a)(1) requires a payor to withhold on
reportable payments (as defined in section
3406(b)(1)) if the payee does not provide
a TIN to the payor in the manner required,
if the Secretary notifies the payor that the
TIN furnished by the payee is incorrect, or
if certain other circumstances exist. Sec-
tion 3406(i) provides that the Secretary
shall prescribe the regulations necessary
or appropriate to carry out the purposes of
section 3406.
Section 31.3406(j)–1 of the Employ-
ment Tax Regulations provides that the
Commissioner has theauthoritytoestab-
lish TIN matching programs through rev-
enue procedures or other appropriate guid-
ance. Under the regulations, a payor or a
payor’s authorized agent may participate
in a TIN matching program that permits
the payor or authorized agent to contact
the IRS with respect to the TIN furnished
by a payee before the payor files an in-
formation return for reportable payments
2007–30 I.R.B.136July 23, 2007

to the payee. The regulations further pro-
vide that the IRS will inform the payor or
the payor’s authorized agent whether or
not the name/TIN combination furnished
by the payee matches a name/TIN com-
bination maintained for the TIN match-
ing program. Revenue Procedure 2003–9,
2003–1 C.B. 516, describes the procedures
for participation in the IRS TIN Matching
Program.
Section 31.3406(g)–1(f) of the Em-
ployment Tax Regulations provides that
the backup withholding requirements of
section3406donotapplytopayments
made through a QPCA if the payments
are made to a qualified payee or during a
grace period. Section 31.3406(g)–1(f)(3)
requires a QPCA to notify the card-
holder/payor when payments are made
to a merchant/payee who is not a qualified
payee. Proposed amendments to these
regulations would require a QPCA to no-
tify the cardholder/payor when payments
are made to a merchant/payee that does
not participate in the QPCA program.
.04Information reporting penalties
and waivers for reasonable cause. Section
6721 of the Code provides that a payor
may be subject to a penalty for failure to
file a complete and correct information
return. Section 6722 of the Code provides
that a payor may be subject to a penalty for
failure to furnish a complete and correct
information statement to a payee. A fail-
ure subject to the section 6721 and section
6722 penalties includes a failure to include
correct payee TINs.
Section 6724 provides that the penalties
under section 6721 and section 6722 may
be waived if the filer shows that the fail-
ure was due to reasonable cause and was
not due to willful neglect. Under section
301.6724–1(e)(1)(vi)(H) and (f)(5)(vii) of
the Regulations on Procedure and Admin-
istration, a cardholder/payor in a payment
card transaction may establish reasonable
cause based on its reliance on a QPCA.
SECTION 4. SCOPE
This revenue procedure applies to pay-
ment card organizations acting or seeking
to act on behalf of cardholder/payors
in soliciting, collecting, and validat-
ing merchant/payee data and on behalf
of merchant/payees in furnishing mer-
chant/payee data to cardholder/payors.
SECTION 5. DEFINITIONS AND
RELATED RULES
The following definitions and related
rules apply solely for purposes of this rev-
enue procedure:
.01Cardholder. A cardholder (or card-
holder/payor) is the person that agrees to
make the payment through the payment
card organization. Thus, in the case of
apaymentcardissuedtoanemployeeof
a person that agrees to make payments
through the payment card organization, the
employer rather than the employee is the
cardholder/payor.
.02Merchant.Amerchant(ormer-
chant/payee) is a person that has agreed
to accept the payment card issued by the
payment card organization as payment for
goods and services.
.03Merchant/payee data.Mer-
chant/payee data includes the mer-
chant/payee’s name, corporate status,
and TIN, and whether the TIN has been
validated through the IRS TIN Matching
Program.
.04Participating payee.Apayeeisa
participating payee with respect to a re-
portable payment if—
(1) The written notice described in sec-
tion 6.03(1)(c) of this revenue procedure
was provided to the payee before the date
on which the QPCA makes the payment;
and
(2) At the time the QPCA makes the
payment, the payee has not declined the
QPCA’s services in the manner prescribed
in the written notice.
.05Payment card. A payment card
is a card (or an account) issued by a
payment card organization to a card-
holder/payor which, upon presentation
to a merchant/payee, represents an agree-
ment of the cardholder to pay the merchant
through the payment card organization.
.06Payment card organization.Apay-
ment card organization is an entity that sets
the standards and provides the mechanism
for effectuating payment between a pur-
chaser and a merchant in a payment card
transaction. A payment card organization
generally provides this payment mecha-
nism by issuing payment cards, enrolling
merchants as authorized acceptors of pay-
ment cards for payment for goods or ser-
vices, and ensuring the system conducts
the transactions in accordance with pre-
scribed standards. In any case in which a
payment card organization acts through a
member, affiliate, or licensee, the action is
treated for purposes of this revenue proce-
dure (including this definition) as an action
by a payment card organization.
.07Qualified Payment Card Agent
(QPCA). A QPCA is a payment card
organization that has a current QPCA de-
termination from the IRS. A person acting
in its capacity as a QPCA does not act as
an agent of the IRS, nor does it have the
authority to hold itself out as an agent of
the IRS.
SECTION 6. APPLICATION AND
REQUIREMENTS FOR QPCA
DETERMINATION
.01Where to apply for QPCA determi-
nation. A person authorized to act on be-
half of a payment card organization may
submit a written request for a QPCA de-
termination to the following address:
Internal Revenue Service
1601 Market Street
20
th
Floor
ATTN: TIN Matching Coordinator
SE:S:CCS:CRC:PC&T
Philadelphia, PA 19107
.02ContentofQPCAapplication.A
payment card organization requesting a
QPCA determination must include the
following in its application:
(1) The name, address, and employer
identification number of the payment card
organization and a description of its busi-
ness.
(2) The name of the department or of-
fice of the payment card organization that
will serve as the information contact.
(3) The name of the department or the
names and titles of the officers or employ-
ees that will be responsible for the perfor-
mance of the TIN solicitation activities de-
scribedinsection7.
(4) A list of the systems, business lines,
or card product lines or levels that will be
covered by the TIN solicitation activities
described in section 7 and that will be cov-
ered by a QPCA determination.
(5) An explanation of the account open-
ing procedures anddocuments the pay-
ment card organization uses, or requires its
members, affiliates, or licensees to use, to
establish merchant account relationships
July 23, 20071372007–30 I.R.B.

related to the payment card organization’s
activities as a QPCA.
(6) The approximate number and the
type of merchants (individuals, corpora-
tions, etc.) enrolled by the payment card
organization.
(7) An explanation of the payment card
organization’s systems and controls re-
lated to the payment card organization’s
activities as a QPCA for—
(a) Obtaining merchant/payee data (in-
cluding merchant/payee data provided by
reputable third-party sources);
(b) Validating the accuracy of the mer-
chant/payee data;
(c) Ensuring the accuracy and reliability
of the merchant/payee data;
(d) Maintaining the merchant/payee
data; and
(e) Supplying the merchant/payee data
to the cardholder/payor.
.03Requirements for QPCA determina-
tion. A payment card organization must
meet the following requirements to obtain
a QPCA determination:
(1)Authorization to act on behalf of
cardholder/payors and on behalf of mer-
chant/payees.
(a) The payment card organization must
establish that cardholder/payors have au-
thorized it or its members, affiliates, or li-
censees to act on their behalf in solicit-
ing, collecting, and validating merchants’
names and TINs and to assist the cardhold-
ers in meeting their information reporting
obligations under section 6041 and sec-
tion 6041A. The payment card organiza-
tion must also establish that merchant/pay-
ees have authorized it or its members, af-
filiates, or licensees to act on their behalf
in furnishing their names, TINs, and cor-
porate status to cardholders and to assist
the merchants in meeting their obligations
under section 6109(a)(2). To satisfy these
requirements, the payment card organiza-
tion must provide the written notice de-
scribed in section 6.03(1)(b) to each card-
holder/payor and must provide the writ-
ten notice described in section 6.03(1)(c)
to each merchant/payee.
(b) The text of the written notice pro-
vided to cardholder/payors must be in bold
and conspicuous type, and the notice must
include the legend: “Important Tax and
Privacy Materials.” The notice must state:
As a cardholder, you may engage in
transactions with merchants for which
you may be required to file an infor-
mation return with the Internal Rev-
enue Service. If you are required to
file an information return with the Inter-
nal Revenue Service reporting a trans-
action, you must include the amount
of the payment, the merchant’s name,
and the merchant’s taxpayer identifica-
tionnumber. Toassistyouinfulfill-
ing these potential information report-
ing requirements, [insert name of pay-
ment card organization] has received
[is seeking] approval from the Inter-
nal Revenue Service to provide a mer-
chant data service to cardholders. If
you accept the merchant data service,
[insert name of payment card organ-
ization] will act on your behalf, and
on behalf of merchants, to solicit, fur-
nish, and validate the merchants’ tax-
payer identification numbers. A mer-
chant’s taxpayer identification number
and other merchant data may be pro-
vided to you through [insert name of is-
suer].
If you accept the merchant data ser-
vice, please be advised that you must
maintain the confidentiality of the mer-
chant data provided to you and that you
may use it only for purposes of backup
withholding and filing information re-
turns with the Internal Revenue Ser-
vice.
You may decline the merchant data
service. If you do not want [insert
name of card organization] to provide
this service to you, you must complete
the enclosed (or attached) form and re-
turn it (or a copy) to [insert, as applica-
ble, mailing, facsimile (fax) transmis-
sion, and/or e-mail directions].
If [insert name of payment card or-
ganization] does not receive your reply
by [insert 60 days after date of notice],
you will be deemed to have agreed to
accept the merchant data service.
If you accept the merchant data ser-
vice, you will receive the merchant data
by U.S. mail unless you complete and
return the enclosed (or attached) con-
sent form indicating that you want to re-
ceive the merchant data electronically.
If you complete the consent form and
return it in the enclosed envelope, you
will be required to confirm your consent
electronically.
You will receive merchant data elec-
tronically only for merchants that have
consented to their data being provided
electronically. You will receive the
merchant data by U.S. mail for mer-
chants that have authorized [insert
name of payment card organization] to
provide their data but do not consent to
thedatabeingprovided electronically.
Your consent to receive the merchant
data electronically will remain in effect
until [insert duration of consent]. You
may withdraw your consent by contact-
ing [insert name of payment card or-
ganization] at [insert address and phone
number]. A withdrawal of consent will
be effective [insert date, such as date re-
ceived or subsequent date]. After con-
senting to receive the merchant data
electronically, you may request a paper
copy of the data by contacting [insert
name of payment card organization] at
[insert address and phone number]. A
request for a paper copy [insert will or
will not] be considered a withdrawal of
your consent to receive the merchant
data electronically.
In order to receive the merchant data
electronically, you will need [insert de-
scription of hardware and software to
access, print, and retain merchant data].
You will be notified of any change in
hardware or software requirements
prior to any change that would create
a risk that you would not be able to
access the merchant data electronically.
[If applicable insert the following:
[Insert name of payment card organiza-
tion] may stop providing the merchant
data to you electronically if [insert con-
ditions].
You must inform [insert name of
payment card organization] of any
changes in your circumstances affect-
ing your ability to receive merchant
data electronically.
For more information, contact [in-
sert contact name and phone number].
The notice may be included in the an-
nual (or periodic) agreement, or amend-
ments thereto, between the payment card
organization and the cardholder or in a sep-
arate document. The notice may be fur-
nished by U.S. mail or electronically. If
furnished by U.S. mail, the outside of the
envelope in which the written notice is
mailed must contain, in bold and conspic-
uous type, the legend: “Important Tax and
Privacy Materials Enclosed.” If furnished
electronically, the subject line of the elec-
tronic communication through which the
2007–30 I.R.B.138July 23, 2007

notice is furnished must contain, in bold
and conspicuous type, the legend: “Impor-
tant Tax and Privacy Materials Enclosed.”
(c) The text of the written notice pro-
vided to merchant/payees must be in bold
and conspicuous type, and the notice must
include the legend: “Important Tax and
Privacy Materials.” The notice must state:
As a merchant, you may engage in
transactions with cardholders for which
cardholders may be required to file an
information return with the Internal
Revenue Service. If a cardholder is
required to file an information return
reportingatransactionwithyoutothe
Internal Revenue Service, the card-
holder must include the amount of the
payment, your name, and your taxpayer
identification number. To facilitate the
exchange of information between you
and cardholders, [insert name of pay-
ment card organization] has received
[is seeking] approval from the Internal
Revenue Service to provide a merchant
data service to merchants that engage
in transactions with cardholders. If
you accept the merchant data service,
[insert name of payment card organ-
ization] will act on your behalf, and
on behalf of cardholders, to solicit,
furnish, and validate your taxpayer
identification number.
If you accept the merchant data
service, your name and your taxpayer
identification number will be submit-
ted to the Internal Revenue Service for
validation against the Internal Revenue
Service taxpayer identification num-
ber database. Please be advised that if
you accept the merchant data service,
[insert name of payment card organi-
zation] may request that you provide
your taxpayer identification number to
it or may seek to obtain your taxpayer
identification number from a reputable
third-party source. If you accept the
merchant data service, your taxpayer
identification number and corporate
status may be provided to cardholders.
Please be aware that [insert name of
payment card organization] has advised
cardholders who mayreceive your tax-
payer identification number that they
must maintain the confidentiality of
your information and may use it only
for purposes of backup withholding
and filing information returns with the
Internal Revenue Service.
You may decline the merchant data
service. If you do not want [insert
name of payment card organization] to
validate your name and taxpayer iden-
tification number; and to provide your
taxpayer identification number and cor-
porate status to cardholders you must
complete the enclosed (or attached)
form and return it [insert, as applicable,
mailing, facsimile (fax) transmission,
and/or e-mail directions].
You will be deemed to have agreed
to accept the merchant data service with
respect to any payments you receive
before the date on which [insert name
of payment card organization] receives
your reply.
[Insert, if applicable: If you de-
cline the merchant data service before
January 1, 2008, you should also dis-
continue accepting the card as a means
of obtaining payment until that date.
If you continue to accept the [insert
name of payment card] as a means
for obtaining payment you will be
deemed, notwithstanding the return
of the enclosed (or attached) form, to
have agreed to accept the merchant data
service with respect to payments you
receive before January 1, 2008.]
If you decline the merchant data
service, you may accept the card as a
means for obtaining payment [if notice
is provided before January 1, 2008,
insert: beginning on January 1, 2008].
If you accept the card as a means of
obtaining payment after declining the
merchant data service, [insert name of
payment card organization] is required
to report to the cardholder making the
payment that you have declined the
merchant data service.
Your information (including, if ap-
plicable, the information that you have
declined the merchant data service) will
be provided to cardholders by U.S. mail
unless you complete and return the en-
closed (or attached) consent form indi-
cating that you want your information
to be provided electronically by [insert
manner (e.g., e-mail or posting on a se-
cure website) by which information will
be provided electronically]. Your con-
sent to your data being provided elec-
tronically will remain in effect until [in-
sert duration of consent]. You may
withdraw your consent by contacting
[insert name of payment card organiza-
tion] at [insert address and phone num-
ber]. A withdrawal of consent will be
effective [insert date, such as date re-
ceived or subsequent date].
For more information, contact [in-
sert contact name and phone number].
The notice may be included in the an-
nual (or periodic) agreement, or amend-
ments thereto, between the payment card
organization and the merchant or in a sep-
arate document. The notice may be fur-
nished by U.S. mail or electronically. If
furnished by U.S. mail, the outside of the
envelope in which the written notice is
mailed must contain, in bold and conspic-
uous type, the legend: “Important Tax and
Privacy Materials Enclosed.” If furnished
electronically, the subject line of the elec-
tronic communication through which the
notice is furnished must contain, in bold
and conspicuous type, the legend: “Impor-
tant Tax and Privacy Materials Enclosed.”
(2)TIN solicitation activities. The pay-
ment card organization must establish that
it has undertaken, or demonstrate that it
will undertake, the TIN solicitation activi-
ties described in section 7.
(3)Reliability of merchant/payee data.
After obtaining the authorizations required
by section 6.03(1), the payment card or-
ganization must participate in the IRS TIN
Matching Program and must demonstrate,
basedontheTINmatchingresults,that
its merchant/payee data is sufficiently re-
liable.
SECTION 7. TIN SOLICITATION
ACTIVITIES
.01TIN solicitation methods.A
QPCA should solicit merchant/payee
TINs in a manner described in sec-
tion 301.6724–1(e)(1)(i) of the Regu-
lations on Procedure and Administra-
tion. Alternatively, a QPCA may obtain
merchant/payee TINs from a reputable
third-party source.
.02Notification and disclosure re-
quirements. A QPCA must give each
merchant/payee for which it acts as agent
the written notice described in section
6.03(1)(c) and must give each card-
holder/payor for which it acts as agent
the written notice described in 6.03(1)(b).
In addition, a QPCA must give written
notice of its status as a QPCA, and of
any change in that status, to any member,
affiliate, or licensee that issues payment
July 23, 20071392007–30 I.R.B.

cards, as well as to the merchant/payees
and cardholder/payors for which it acts as
agent.
.03TIN Matching participation.A
QPCA must participate in the IRS TIN
Matching Program and must match its
merchant/payee data relating to reportable
payments of participating merchant/pay-
ees with IRS within three months after
obtaining the merchant/payee’s TIN. A
QPCA may seek to cure merchant/payee
data that has not previously been val-
idated through the IRS TIN Matching
Program. The QPCA must transmit only
merchant/payee data that has not previ-
ously been validated through IRS TIN
Matching.
.04Providing nonparticipating payee
notifications and merchant/payee data
to cardholders. The QPCA must pro-
vide cardholder/payors with a report
containing notifications required by
§31.3406(g)(3)(i)(B) (nonparticipating
payee notifications) and merchant/payee
data within four months of the date on
which the QPCA makes the payment to
which the notification or data relates. The
report may be provided on a quarterly
or other regular basis. The report must
include the merchant/payee’s name and,
if the merchant/payee is not a participat-
ing merchant/payee with respect to any
reportable payment covered by the report,
must include a notification to that effect.
If the merchant/payee is a participating
payee with respect to all reportable pay-
ments covered by the report, the report
must also include the merchant/payee’s
corporate status and TIN, and whether the
TIN has been validated through participa-
tion in the IRS TIN Matching Program.
A QPCA must furnish the report contain-
ing nonparticipating payee notifications
and merchant/payee data for transactions
occurring on or before December 31 of a
calendar year no later than January 15 of
the following calendar year.
The report may be furnished by U.S
mail or electronically (e.g.,bye-mailor
posting on a secure website). A QPCA
may furnish nonparticipating payee notifi-
cations and merchant/payee data electron-
ically only if it has obtained the consents
described in the written notices required
by section 6.03(1) and the consents have
not been withdrawn. If the report is posted
on a website, the website must protect the
privacy of nonparticipating payee notifica-
tions and merchant/payee data and allow
access to the nonparticipating payee notifi-
cation or merchant/payee data relating to a
payee only to cardholder/payors that have
made a reportable payment to that mer-
chant/payee.
SECTION 8. OTHER REQUIREMENTS
.01Availability of records.Apay-
ment card organization and its members,
affiliates, and licensees must respond to
any reasonable IRS request for inspection
of any books and records that relate to
the operation of TIN solicitation activ-
ity, including, but not limited to, reports,
memoranda, budgets, and computer print-
outs. The payment card organization and
its members, affiliates, and licensees must
allow the IRS reasonable access to the
merchant/payee TIN data system, includ-
ing instruction manuals describing the
system.
.02Change in information.TheQPCA
must promptly notify the IRS of any
change in the information described in
section 6.
.03Confidentiality of information.For
purposes of this revenue procedure, the
payment card organization and its mem-
bers, affiliates, and licensees must main-
tain the confidentiality of information ob-
tained through the TIN solicitation activi-
ties in accordance with the requirements of
section 31.3406(f)–1 of the Employment
Tax Regulations. Except as permitted
under section 31.3406(f)–1, the payment
card organization and its members, affil-
iates, and licensees may not disclose any
such information to any person other than
the cardholder/payor without prior written
consent of the merchant/payee. The IRS
will treat all information provided by a
QPCA as return information that is confi-
dential under section 6103.
SECTION 9. TERM, RENEWALS, AND
TERMINATION
.01Term and renewal. In general, a
QPCA determination will be effective for
five years from the date of the determi-
nation. A QPCA may request a renewal
of the QPCA determination by submitting
an application for renewal to the IRS no
earlier than 12 months and no later than
three months before the expiration of the
five-year term. In the application for re-
newal, the QPCA must report any change
in the information in the original applica-
tion. Before renewal of the determination,
the IRS may review the QPCA’s systems.
In addition, the QPCA must demonstrate
that the merchant/payee data continues to
be reliable. The application for renewal
must include the results from participation
in the IRS TIN Matching Program during
the current five-year term. The IRS will
make every effort to issue a decision on a
renewal application at least 30 days before
the expiration of the current five-year term.
In the event that the IRS does not issue a
decision on a timely renewal application
before the expiration of the existing QPCA
determination, the existing determination
will remain in effect until the IRS issues a
decision on the renewal application.
.02Revocation of determination.The
IRS may revoke a QPCA determination
before the expiration of its five-year term
if the IRS determines, based on the re-
sults of the QPCA’s participation in the
IRS TIN Matching Program, that the mer-
chant/payee data is not reliable or if the
payment card organization fails to meet
any of the requirements in section 6, 7, or
8. A QPCA may terminate its status as a
QPCA upon 60 days written notice to the
IRS.
SECTION 10. Rev. Proc. 2004–42 is
superseded.
SECTION 11. EFFECTIVE DATE
These procedures are proposed to be ef-
fective on the date they are published as a
final revenue procedure.
SECTION 12. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Michael Hara of the Office
of Associate Chief Counsel (Procedure
and Administration). For further infor-
mation regarding this revenue procedure,
contact Mr. Hara at (202) 622–4910 (not
a toll-free call).
Weighted Average Interest
Rates Update
Notice 2007–61
This notice provides guidance as to the
corporate bond weighted average interest
2007–30 I.R.B.140July 23, 2007

rate and the permissible range of interest
rates specified under § 412(b)(5)(B)(ii)(II)
of the Internal Revenue Code. In addi-
tion, it provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II).
CORPORATE BOND WEIGHTED
AVERAGE INTEREST RATE
Sections 412(b)(5)(B)(ii) and 412(l)(7)
(C)(i), as amended by the Pension Funding
Equity Act of 2004 and by the Pension Pro-
tection Act of 2006, provide that the inter-
est rates used to calculate current liability
and to determine the required contribution
under § 412(l) for plan years beginning in
2004 through 2007 must be within a per-
missible range based on the weighted av-
erage of the rates of interest on amounts
invested conservatively in long term in-
vestment grade corporate bonds during the
4-year period ending on the last day before
the beginning of the plan year.
Notice 2004–34, 2004–1 C.B. 848, pro-
vides guidelines for determining the cor-
porate bond weighted average interest rate
and the resulting permissible range of in-
terest rates used to calculate current liabil-
ity. That notice establishes that the corpo-
rate bond weighted average is based on the
monthly composite corporate bond rate de-
rived from designated corporate bond in-
dices. The methodology for determining
the monthly composite corporate bond rate
as set forth in Notice 2004–34 continues to
apply in determining that rate. See Notice
2006–75, 2006–36 I.R.B. 366.
The composite corporate bond rate for
June 2007 is 6.32 percent. Pursuant to No-
tice 2004–34, the Service has determined
this rate as the average of the monthly
yields for the included corporate bond in-
dices for that month.
The following corporate bond weighted
average interest rate was determined for
plan years beginning in the month shown
below.
For Plan Years
Corporate
Bond90% to 100%
Beginni
ng in:
Weighte
d
Permiss
ible
MonthYearAverageRange
July20075.835.25 to
5.83
30-YEAR TREASURY SECURITIES
INTEREST RATE
Section 417(e)(3)(A)(ii)(II) defines
the applicable interest rate, which must
be used for purposes of determining the
minimum present value of a participant’s
benefit under § 417(e)(1) and (2), as the
annual rate of interest on 30-year Treasury
securities for the month before the date
of distribution or such other time as the
Secretary may by regulations prescribe.
Section 1.417(e)–1(d)(3) of the Income
Tax Regulations provides that the applica-
ble interest rate for a month is the annual
interest rate on 30-year Treasury securi-
ties as specified by the Commissioner for
that month in revenue rulings, notices or
other guidance published in the Internal
Revenue Bulletin.
The rate of interest on 30-year Treasury
securities for June 2007 is 5.20 percent.
The Service has determined this rate as the
monthly average of the daily determina-
tion of yield on the 30-year Treasury bond
maturing in February 2037.
Drafting Information
The principal authors of this notice are
Paul Stern and Tony Montanaro of the Em-
ployee Plans, Tax Exempt and Govern-
ment Entities Division. For further infor-
mation regarding this notice, please con-
tact the Employee Plans’ taxpayer assis-
tance telephone service at 877–829–5500
(a toll-free number), between the hours of
8:30 a.m. and 4:30 p.m. Eastern time,
Monday through Friday. Mr. Stern may be
reached at 202–283–9703. Mr. Montanaro
may be reached at 202–283–9714. The
telephone numbers in the preceding sen-
tences are not toll-free.
26 CFR 601.202: Closing agreements.
Rev. Proc. 2007–49
SECTION 1. PURPOSE
.01 This revenue procedure describes
the consequence to a sponsor or practi-
tioner maintaining a pre-approved plan
that submits its plan for review after the
established deadline in section 16 of Rev.
Proc. 2007–44, 2007–28 I.R.B. 54.
.02 This revenue procedure also modi-
fies the streamlined VCP application pro-
cedure for failures set forth in section 11.01
and Appendix F of Rev. Proc. 2006–27,
2006–1 C.B. 945.
SECTION 2. BACKGROUND
.01 Rev. Proc. 2006–27 sets forth
the Employee Plans Compliance Resolu-
tion System (“EPCRS”), a comprehensive
system of correction programs that per-
mits plan sponsors to correct qualification
failures and thereby preserve their plans’
tax-favored status. The components of
EPCRS are the Self-Correction Program
(“SCP”), the Voluntary Correction Pro-
gram (“VCP”), and the Audit Closing
Agreement Program (“Audit CAP”). Un-
der SCP, a plan sponsor may correct
certain qualification failures, including
operational failures described in Appendix
B of that procedure as being correctable
by plan amendment. Under VCP, a Plan
Sponsor, before audit, may submit to the
Service and receive approval for correc-
tion of qualification failures. Under Audit
CAP, a plan sponsor may correct qualifi-
cation failures that are identified on audit.
.02 Rev. Proc. 2005–16, 2005–1 C.B.
674, sets forth the Service’s procedures
for issuing opinion and advisory letters re-
garding the acceptability under §§ 401 and
403(a) of the Internal Revenue Code of the
form of pre-approved plans (i.e.,master
and prototype (M&P) and volume submit-
ter (VS) plans).
.03 An application for an opinion let-
ter for an M&P plan may be submitted
by a sponsor (as defined in Rev. Proc.
2005–16) who satisfies the requirements
of section 4.07 of Rev. Proc. 2005–16. In
the alternative, an application for an opin-
July 23, 20071412007–30 I.R.B.

ion letter may be submitted by an M&P
Mass Submitter (as defined in section 4.08
of Rev. Proc. 2005–16) or a word-for-
word identical adopteror minor modifier
adopter of a plan of an M&P Mass Sub-
mitter as provided in section 4.08 of Rev.
Proc. 2005–16.
.04 An application for an advisory let-
ter for a VS plan may be submitted by a
VS practitioner (as defined in Rev. Proc.
2005–16) who satisfies the requirements
of section 13.04 of Rev. Proc. 2005–16. In
the alternative, an application for an advi-
sory letter may be submitted by a VS Mass
Submitter (as defined in section 13.05 of
Rev. Proc. 2005–16) or a word-for-word
adopter of a plan of a VS Mass Submitter
as provided in section 13.05 of Rev. Proc.
2005–16.
.05 Rev. Proc. 2007–44 sets forth
a system of cyclical remedial amendment
periods under § 401(b) for pre-approved
plans and individually designed plans. Un-
der this system, every pre-approved plan
generally has a regular six-year remedial
amendment/approval cycle. As a result,
sponsors and practitioners generally need
to apply for new opinion or advisory let-
ters only once every six years.
.06 Section 16.02 of Rev. Proc.
2007–44 provides that sponsors and prac-
titioners maintaining pre-approved plans
generally have until January 31
st
of the
calendar year following the opening of
the six-year remedial amendment cycle
to submit applications for opinion or ad-
visory letters. This deadline also applies
to word-for-word identical adopters and
minor modifier placeholder applications.
.07 Section 16.03 of Rev. Proc.
2007–44 provides that when the review
of a cycle for pre-approved plans has
neared completion (after approximately a
two-year review process), the Service will
publish an announcement providing the
date by which adopting employers must
adopt the newly approved plans. This will
be a uniform date that will apply to all
adopting employers. Depending upon the
length of the review process, it is expected
that this date will give virtually all em-
ployers approximately a two-year window
to adopt their updated plans.
.08 Section 17.01 of Rev. Proc.
2007–44 provides that an employer’s
plan will be treated as a pre-approved
plan and therefore eligible for a six-year
amendment/approval cycle if the em-
ployer’s plan meets the requirements of
section 17.01(1) of Rev. Proc. 2007–44
and the sponsor or practitioner maintain-
ing the pre-approved plan timely submits
an opinion or advisory letter application in
accordance with section 17.01(2) of Rev.
Proc. 2007–44.
SECTION 3. VCP STREAMLINED
SUBMISSION PROCEDURE FOR
THE FAILURE TO ADOPT TIMELY
CERTAIN AMENDMENTS
Section 11.01 of Rev. Proc. 2006–27
is supplemented to provide the follow-
ing. The Appendix F format should not
be modified. In addition, since it is a
document that is executed by the Internal
Revenue Service, it should not be sub-
mitted under the letterhead of the plan
sponsor or the plan sponsor’s authorized
representative. The failure to provide the
information required by Appendix F in the
format provided for by Appendix F may
result in the application being returned as
an incomplete submission.
SECTION 4. LATE SUBMISSIONS FOR
OPINION OR ADVISORY LETTERS
.01 Applications for opinion or advi-
sory letters submitted by sponsors and
practitioners, including word-for-word
identical adopters and minor modifier
placeholder applications, are generally
processed in the order received. If a spon-
sororpractitionerofanM&PorVSplan
with a valid opinion or advisory letter from
the immediately preceding six-year cycle
(or, for the initial six-year cycle, a valid
opinion or advisory letter for GUST
1
)
submits an application for an opinion or
advisory letter after the scheduled due date
provided for in section 16 of Rev. Proc.
2007–44 (or in the predecessor procedure,
Rev. Proc. 2005–66, 2005–2 C.B. 509)
or in any successor revenue procedure,
then the review of the plan will be delayed
and may not be completed by the time the
review of timely submitted pre-approved
plans is completed for other sponsors and
practitioners (approximately two years).
As a result, an employer adopting such
plan may have less than two years to adopt
the late submitted pre-approved plan (i.e.,
less time than an employer adopting a
pre-approved plan that had been submitted
by the deadline set forth in section 16 of
Rev. Proc. 2007–44).
.02 Any application for an opinion or
advisory letter submitted by sponsors and
practitioners, including word-for-word
identical adopters and minor modifier
placeholder applications, should be mailed
to the address listed in section 20 of Rev.
Proc. 2005–16 and include the appropriate
user fee referred to in section 6.05 or 6.06
of Rev. Proc. 2007–8, 2007–1 I.R.B. 230.
SECTION 5. EFFECTIVE DATE
Section 3 of this revenue procedure is
effective August 28, 2007. Section 4 of
this revenue procedure applies to all late
submissions for opinion or advisory letters
made after January 31, 2006.
SECTION 6. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2006–27 is modified.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Avaneesh Bhagat of the
Employee Plans, Tax Exempt and Gov-
ernment Entities Division. For further
information regarding this revenue proce-
dure, please contact the Employee Plans’
taxpayer assistance telephone service
at 1–877–829–5500 (a toll-free num-
ber) between the hours of 8:30 a.m.
and 4:30 p.m. Eastern time, Mon-
day through Friday or Mr. Bhagat at
RetirementPlanQuestions@irs.gov.
1
The term “GUST” refers to the following:
•the Uruguay Round Agreements Act, Pub. L. 103–465;
•the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103–353;
•the Small Business Job Protection Act of 1996, Pub. L. 104–188;
•the Taxpayer Relief Act of 1997, Pub. L. 105–34;
•the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105–206; and
•the Community Renewal Tax Relief Act of 2000, Pub. L. 106–554.
2007–30 I.R.B.142July 23, 2007

Use this Revenue Procedure to prepare Tax Year2007and prior year information returns for submission to Internal Revenue Service
(IRS) using any of the following:
- Electronic Filing
- Tape Cartridge
Caution to filers:
Please read this publication carefully. Persons or businesses required to file information returns electronically or
magnetically may be subject to penalties for failure to file or include correct information if they do not follow the
instructions in this Revenue Procedure.
IMPORTANT NOTES:
IRS/ECC-MTB now offers an Internet connection at h
ttp://fire.irs.govfor electronic filing. The Filing Information Returns
Electronically (FIRE) System will be down from 2 p.m. E.S.T. Dec. 20, 2007, through Jan. 2, 2008 for upgrading. It is not
operational during this time for submissions. The FIRE System does not provide fill-in forms for information returns.
IRS/ECC-MTB no longer accepts 3
1
/2-inch diskettes for filing information returns.
Tax year 2007 is the last year IRS/ECC-MTB will accept tape cartridges for the filing of information returns. Tape
cartridges must be received by DECEMBER 1, 2008 in order tobe processed for the current year. After December 1, 2008,
electronic filing will be the ONLY acceptable method to file information returns at ECC-MTB.
Rev. Proc. 2007–51
TABLE OF CONTENTS
Part A. General
SEC. 1. PURPOSE................................................................................................. 145
SEC. 2. NATURE OF CHANGES — CURRENT YEAR (TAX YEAR2007)................................................. 146
SEC. 3. WHERE TO FILE
AND HOW TO CONTACT THE IRS, ENTERPRISE COMPUTING CENTER —
MARTINSBURG
....................................................................................... 147
SEC. 4. FILING REQUIREMENTS.................................................................................. 148
SEC. 5. VENDOR LIST............................................................................................. 149
SEC. 6. FORM 4419, APPLICATION FOR FILING INFORMATION RETURNS ELECTRONICALLY........................ 149
SEC. 7. FILING OF INFORMATION RETURNS MAGNETICALLY AND RETENTION REQUIREMENTS.................... 150
SEC. 8. DUE DATES............................................................................................... 151
SEC. 9. REPLACEMENT TAPE CARTRIDGES........................................................................ 152
SEC. 10. CORRECTED RETURNS................................................................................... 152
SEC. 11. EFFECT ON PAPER RETURNS AND STATEMENTS TO RECIPIENTS.......................................... 156
SEC. 12. COMBINED FEDERAL/STATE FILING PROGRAM........................................................... 156
SEC. 13. PENALTIES ASSOCIATED WITH INFORMATION RETURNS.................................................. 158
SEC. 14. STATE ABBREVIATIONS.................................................................................. 159
July 23, 20071432007–30 I.R.B.

SEC. 15. MAJOR PROBLEMS ENCOUNTERED...................................................................... 160
Part B. Electronic Filing Specifications
SEC. 1. GENERAL................................................................................................. 161
SEC. 2. ADVANTAGES OF FILING ELECTRONICALLY............................................................... 161
SEC. 3. ELECTRONIC FILING APPROVAL PROCEDURE............................................................. 161
SEC. 4. TEST FILES............................................................................................... 162
SEC. 5. ELECTRONIC SUBMISSIONS............................................................................... 162
SEC. 6. PIN REQUIREMENTS...................................................................................... 163
SEC. 7. ELECTRONIC FILING SPECIFICATIONS.................................................................... 163
SEC. 8. CONNECTING TO THE FIRE SYSTEM....................................................................... 163
SEC. 9. COMMON PROBLEMS AND QUESTIONS ASSOCIATED WITH ELECTRONIC FILING........................... 165
Part C. Tape Cartridge Filing Specifications
Part D. Record Format Specifications and Record Layouts
SEC. 1. GENERAL................................................................................................. 166
SEC. 2. TRANSMITTER “T” RECORD — GENERAL FIELD DESCRIPTIONS............................................ 167
SEC. 3. TRANSMITTER “T” RECORD — RECORD LAYOUT.......................................................... 169
SEC. 4. PAYER “A” RECORD — GENERAL FIELD DESCRIPTIONS.................................................... 170
SEC. 5. PAYER “A” RECORD — RECORD LAYOUT.................................................................. 179
SEC. 6. PAYEE “B” RECORD — GENERAL FIELD DESCRIPTIONS AND RECORD LAYOUTS............................ 180
(1)Payee“B”Record—RecordLayoutPositions544–750forForm1098........................................... 187
(2)Payee“B”Record—RecordLayoutPositions544–750forForm1098–C......................................... 187
(3)Payee“B”Record—RecordLayoutPositions544–750forForm1098–E......................................... 188
(4)Payee“B”Record—RecordLayoutPositions544–750forForm1098–T......................................... 189
(5)Payee“B”Record—RecordLayoutPositions544–750forForm1099–A ........................................ 190
(6)Payee“B”Record—RecordLayoutPositions544–750forForm1099–B......................................... 191
(7)Payee“B”Record—RecordLayoutPositions544–750forForm1099–C......................................... 192
(8)Payee“B”Record—RecordLayoutPositions544–750forForm1099–CAP...................................... 193
(9)Payee“B”Record—RecordLayoutPositions544–750forForm1099–DIV...................................... 194
(10)Payee“B”Record—RecordLayoutPositions544–750forForm1099–G ........................................ 195
(11)Payee“B”Record—RecordLayoutPositions544–750forForm1099–H ........................................ 196
(12)Payee“B”Record—RecordLayoutPositions544–750forForm1099–INT ...................................... 197
(13)Payee“B”Record—RecordLayoutPositions544–750forForm1099–LTC...................................... 198
(14)Payee“B”Record—RecordLayoutPositions544–750forForm1099–MISC..................................... 200
(15)Payee“B”Record—RecordLayoutPositions544–750forForm1099–OID...................................... 201
(16)Payee“B”Record—RecordLayoutPositions544–750forForm1099–PATR..................................... 202
(17)Payee“B”Record—RecordLayoutPositions544–750forForm1099–Q ........................................ 202
(18)Payee“B”Record—RecordLayoutPositions544–750forForm1099–R......................................... 203
(19)Payee“B”Record—RecordLayoutPositions544–750forForm1099–S......................................... 207
(20)Payee“B”Record—RecordLayoutPositions544–750forForm1099–SA....................................... 208
(21)Payee“B”Record—RecordLayoutPositions544–750forForm5498........................................... 209
(22)Payee“B”Record—RecordLayoutPositions544–750forForm5498–ESA ..................................... 211
(23)Payee“B”Record—RecordLayoutPositions544–750forForm5498–SA....................................... 211
(24)Payee“B”Record—RecordLayoutPositions544–750forFormW–2G.......................................... 212
2007–30 I.R.B.144July 23, 2007

SEC. 7. END OF PAYER “C” RECORD — GENERAL FIELD DESCRIPTIONS AND RECORD LAYOUT.................... 213
SEC. 8. STATE TOTALS “K” RECORD — GENERAL FIELD DESCRIPTIONS AND RECORD LAYOUT..................... 215
SEC. 9. END OF TRANSMISSION “F” RECORD — GENERAL FIELD DESCRIPTIONS AND RECORD
LAYOUT
............................................................................................. 217
SEC. 10. FILE LAYOUT DIAGRAM.................................................................................. 218
Part E. Extensions of Time and Waivers
SEC. 1. GENERAL — EXTENSIONS................................................................................. 218
SEC. 2. SPECIFICATIONS FOR ELECTRONIC FILING OR TAPE CARTRIDGE EXTENSIONS OF TIME................... 219
SEC. 3. RECORD LAYOUT — EXTENSION OF TIME................................................................. 220
SEC. 4. EXTENSION OF TIME FOR RECIPIENT COPIES OF INFORMATION RETURNS................................. 221
SEC. 5. FORM 8508, REQUEST FOR WAIVER FROM FILING INFORMATION RETURNS
ELECTRONICALLY/MAGNETICALLY
.................................................................. 222
Part A. General
Revenue Procedures are generally revised annually to reflect legislative and form changes. Comments concerning this Revenue
Procedure, or suggestions for making it more helpful, can be addressed to:
Internal Revenue Service
Enterprise Computing Center — Martinsburg
Attn: Information Reporting Program
230 Murall Drive
Kearneysville, WV 25430
Sec. 1. Purpose
.01The purpose of this Revenue Procedure is to provide the specifications for filing Forms 1098, 1099, 5498, and W–2G with IRS
electronically through the IRS FIRE System or magnetically, using IBM 3480, 3490, 3490E, 3590, or 3590E tape cartridges. This
Revenue Procedure must be used for the preparation of Tax Year2007information returns and information returns for tax years prior
to2007filed beginning January 1, 2008. Tape cartridge files must be received by December 1, 2008 in order to be processed. After
December 1, 2008 only electronic files are acceptable.Specifications for filing the following forms are contained in this Revenue
Procedure.
(a)Form 1098, Mortgage Interest Statement
(b)Form 1098–C, Contributions of Motor Vehicles, Boats, and Airplanes
(c)Form 1098–E, Student Loan Interest Statement
(d)Form 1098–T, Tuition Statement
(e)Form 1099–A, Acquisition or Abandonment of Secured Property
(f)Form 1099–B, Proceeds From Broker and Barter Exchange Transactions
(g)Form 1099–C, Cancellation of Debt
(h)Form 1099–CAP, Changes in Corporate Control and Capital Structure
(i)Form 1099–DIV, Dividends and Distributions
(j)Form 1099–G, Certain Government Payments
(k)Form 1099–H, Health Coverage Tax Credit (HCTC) Advance Payments
(l)Form 1099–INT, Interest Income
(m)Form 1099–LTC, Long-Term Care and Accelerated Death Benefits
(n)Form 1099–MISC, Miscellaneous Income
(o)Form 1099–OID, Original Issue Discount
(p)Form 1099–PATR, Taxable Distributions Received From Cooperatives
(q)Form 1099–Q, Payments From Qualified Education Programs (Under Sections 529 and 530)
(r)Form 1099–R, Distributions From Pensions, Annuities, Retirement or Profit-SharingPlans, IRAs, Insurance Contracts, etc.
(s)Form 1099–S, Proceeds From Real Estate Transactions
(t)Form 1099–SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
July 23, 20071452007–30 I.R.B.

(u)Form 5498, IRA Contribution Information
(v)Form 5498–ESA, Coverdell ESA Contribution Information
(w)Form 5498–SA, HSA, Archer MSA, or Medicare Advantage MSA Information
(x)Form W–2G, Certain Gambling Winnings
.02All data received at IRS/ECC-MTB for processing will be given the same protection as individual income tax returns (Form
1040). IRS/ECC-MTB will process the data and determine if the records are formatted and coded according to this Revenue Procedure.
.03Specifications for filing Forms W–2, Wageand Tax Statement, electronically areonlyavailable from the Social Security Ad-
ministration (SSA). Filers can call 1–800–SSA–6270 to obtain thetelephone number of the SSA Employer Service Liaison Officer
for their area.
.04IRS/ECC-MTB doesnotprocess Forms W–2. Paperand/orelectronic filing of Forms W–2 must be sent to SSA. IRS/ECC-
MTB does, however, process waiver requests (Form 8508) and extension of time to file requests (Form 8809) for Forms W–2 as well
as requests for an extension of time to provide the employee copies of Forms W–2.
.05Generally, the box numbers on the paper forms correspond withthe amount codes used to file electronically/magnetically;
however, if discrepancies occur, the instructions in this Revenue Procedure must be followed.
.06This Revenue Procedure also provides the requirements and specifications for electronic or tape cartridge filing under the
Combined Federal/State Filing Program.
.07The following Revenue Procedures and publications provide moredetailed filing procedures for certain information returns:
(a)2007 General Instructions for Forms 1099, 1098, 5498, and W–2Gand individual form instructions.
(b)Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W–2G, and 1042–S.
(c)Publication 1239, Specifications for Filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated
Tips, Electronically or Magnetically
(d)Publication 1187, Specifications for Filing Form 1042–S, Foreign Person’s U.S. Source Income Subject to Withholding,
Electronically or Magnetically
.08This Revenue Procedure supersedes Rev. Proc. 2006–33 published as Publication 1220 (Rev. 10–2006), Specifications for
Filing Forms 1098, 1099, 5498, and W–2G Electronically or Magnetically.
Sec. 2. Nature of Changes — Current Year (Tax Year2007)
.01In this publication, all pertinent changes for Tax Year2007are emphasized by the use ofitalics. Portions of text that require
special attention are in boldface text. Filers are always encouraged to read the publication in its entirety.
a. General
(1)ECC-MTB no longer accepts 3
1
/2-inch diskettes for the filing of information returns.
(2) Tax Year 2007 will be the last year ECC-MTB accepts tape cartridges.Due to processing deadlines, tape cartridges
must be received by December 1, 2008 in order to be processed for the current year. AfterDecember 1, 2008, the only
acceptable method of filing information returns with ECC-MTB will be electronically through the FIRE System.
(3)Test procedures have been eliminated from Part A since tape cartridges will not be acceptable after December 1, 2008.
Electronic filing specifications, Part B, Sec. 4 details testing procedures for electronic files.
(4)Form 8809, Application for Extension of Time To File Information Returns, is available as a fill-in form on the FIRE System
and is highly encouraged in lieu of the paper Form 8809. (See Part E, Sec. 1.)
.02 Programming Changes
a. Programming Changes —Transmitter “T” Record
(1)For all Forms, Payment Year, Field Positions 2 – 5, must be incremented to update the four-digit reporting year (2006 to
2007), unless reporting prior year data.
b. Programming Changes — Payer “A” Record
(1)For all Forms, Payment Year, Field Positions 2 – 5, must be incremented to update the four-digit reporting year (2006 to
2007), unless reporting prior year data.
(2)For Form 1098, Amount Code 4 was changed to Mortgage Insurance Premiums. Amount Code 5 was added for Filer’s Use.
(3)Three fields were deleted from the Payer ‘A’ Record and are nolonger required. The deleted fields are Original File Indi-
cator, position 48, Replacement File Indicator, position 49, and Correction File Indicator,position 50. Positions 48–50 are
now blank.
2007–30 I.R.B.146July 23, 2007

c. Programming Changes — Payee “B” Record
(1)For all Forms, Payment Year, Field Positions 2 – 5, must be incremented to update the four-digit reporting year (2006 to
2007), unless reporting prior year data.
(2)Form 1098–T, Method of Reporting Indicator, position 550, was simplified. A single indicator of ‘1’ is used to indicate if
the method of reporting changed from the previous year. A blank indicates no change occurred.
(3)Form 1099–R, Date of Designated Roth Contribution, position552–559, changed to First Year of Designated Roth Contri-
bution, positions 552–555. Only the year of the first Roth contribution is required not the complete date.
(4)For Form 1099–R , Distribution Code ‘B’ may now be used with codes ‘P’ and ‘4’.
(5)The state of Utah, state code 49, was added to the CombinedFederal/State Filing Program. See Part A, Sec. 12 for the
Participating States and Their Codes table.
Sec. 3. Where To File and How to Contact the IRS, Enterprise Computing Center — Martinsburg
.01All information returns filed electronically or magnetically are processed at IRS/ECC-MTB. Files containing information re-
turns and requests for IRS electronic and tape cartridge filing information should be sent to the following address:
IRS-Enterprise Computing Center — Martinsburg
Information Reporting Program
230 Murall Drive
Kearneysville, WV 25430
.02All requests for an extension of time to file information returns with IRS/ECC-MTB filed on Form 8809 or request fo
ran
extension to provide recipient copies, and requests forundue hardship waivers filed on Form 8508 should be sent t
o the following
address:
IRS-Enterprise Computing Center — Martinsburg
Information Reporting Program
Attn: Extension of Time Coordinator
240 Murall Drive
Kearneysville, WV 25430
.03The telephone numbers for tape cartridge inquiries or electronic submissions are:
Information Reporting Program Customer Service Section
TOLL-FREE 1–866–455–7438 or outside the U.S. 1–304–263–8700
email at m
ccirp@irs.gov
304–267–3367 — TDD
(Telecommunication Device for the Deaf)
304–264–5602 — Fax Machine
Electroni
c Filing — FIRE System
h
ttp://fire.irs.gov
TO OBTAIN FORMS:
1–800–TAX–FORM (1–800–829–3676)
w
ww.irs.gov— IRS website access to forms (See Note.)
Note: Because paper forms are scanned during processing, youcannot use forms printed from the IRS website to file Form
1096, and Copy A of Forms 1098, 1099, or 5498 with the IRS.
.04The2007 General Instructions for Forms 1099, 1098, 5498, and W–2Gare included in the Publication 1220 for your conve-
nience. Form 1096 is used only to transmit Copy A ofpaperForms 1099, 1098, 5498, and W–2G. If filing paper returns, follow the
mailing instructions on Form 1096 and submit the paper returns to the appropriate IRS Service Center.
.05Make requests for paper Forms 1096, 1098, 1099, 5498, and W–2G,and publications related to electronic/magnetic filing by
calling the IRS toll-free number1–800–TAX–FORM (1–800–829–3676) or ordering online from the IRS website at w
ww.irs.gov.
July 23, 20071472007–30 I.R.B.

.06Questions pertaining to magnetic media or internet filing of Forms W–2mustbe directed to the Social Security Administration
(SSA). Filers can call 1–800–772–6270 to obtain the phone number of the SSA Employer Service Liaison Officer for their area.
.07Payersshould notcontact IRS/ECC-MTB if they have received a penaltynotice and need additional information or are re-
questing an abatement of the penalty. A penalty notice contains an IRS representative’s name and/or telephone number for contact
purposes; or the payer may be instructed to respond inwriting to the address provided. IRS/ECC-MTB doesnotissue penalty no-
tices and doesnothave the authority to abate penalties. For penaltyinformation, refer to the Penalties section of the2007 General
Instructions for Forms 1099, 1098, 5498, and W–2G.
.08A taxpayer or authorized representative may request a copy of a tax return, including Form W–2 filed with a return, by submitting
Form 4506, Request for Copy of Tax Return, to IRS. This form may be obtained by calling1–800–TAX–FORM (1–800–829–3676)
or by downloading from the IRS website at w
ww.irs.gov.For any questions regarding this form, call 1–800–829–1040.
.09The Information Reporting Program Customer Service Section (IRP/CSS), located at IRS/ECC-MTB, answers electronic/tape
cartridge, paper filing, and tax law questions from the payer community relating to the correct preparation and filing of business
information returns (Forms 1096, 1098, 1099, 5498, 8027, and W–2G).IRP/CSS also answers questions relating to the electronic/tape
cartridge filing of Forms 1042–S and the tax law criteria and paper filinginstructions for Forms W–2 and W–3. Inquiries dealing
with backup withholding and reasonable cause requirements due to missing and incorrect taxpayer identification numbers are also
addressed by IRP/CSS. Assistance is available year-round to payers, transmitters, and employers nationwide, Monday through Friday,
8:30 a.m. to 4:30 p.m. Eastern Time, by calling toll-free1–866–455–7438or via email at m
ccirp@irs.gov.Do not include SSNs or
EINs in emails or in attachments since this is not a secure line.The Telecommunications Device for the Deaf(TDD)toll number
is304–267–3367.Call as soon as questions arise to avoid the busy filing seasons at the end of January and February. Recipients of
information returns (payees) should continue to contact 1–800–829–1040 with any questions on how to report the information returns
data on their tax returns.
.10IRP/CSS cannot advise filers where to send state copies of paper forms. Filers must contact the Tax Department in the state
where the recipient resides to obtain thecorrect address and filing requirements.
.11Form 4419, Application for Filing Information Returns Electronically, Form 8809, Application for Extension of Time To File
Information Returns, and Form 8508, Request for Waiver From FilingInformation ReturnsElectronically/Magnetically, may be faxed
to IRS/ECC-MTB at 304–264–5602. Form 4804, Transmittalof Information Returns Reported Magnetically,mustalways be included
with media shipments.
Sec. 4. Filing Requirements
.01The regulations under section 6011(e)(2)(A) of the Internal Revenue Code provide that any person, including a corporation,
partnership, individual, estate, and trust, who is required to file250 or more information returns must file such returns electroni-
cally/magnetically.The 250* or more requirement applies separately foreach type of return and separately to each type of
corrected return.
*Even though filers may submit up to 249 information returns onpaper, IRS encourages filers to transmit those information
returns electronically or magnetically.
.02All filing requirements that follow apply individually to each reporting entity as defined by its separate Taxpayer Identification
Number (TIN), which may be either a Social Security Number (SSN),Employer Identification Number (EIN), or Individual Taxpayer
Identification Number (ITIN). For example, if a corporation with several branches or locations usesthe same EIN, the corporation
must aggregate the total volume of returns to be filed for that EIN and apply the filing requirements to each type of return accordingly.
.03Payers who are required to submit their information returns on magnetic media may choose to submit their documents by
electronic filing. Payers, who submit their information returns electronically by March 31,2008, are considered to have satisfied the
magnetic media filing requirements.
.04IRS/ECC-MTB has one method for filing information returns electronically; see Part B.
.05The following requirements apply separately to both originals and corrections filed electronically/magnetically:
2007–30 I.R.B.148July 23, 2007

1098
1098–C
1098–E
1098–T
1099–A
1099–B
1099–C
1099–CAP
1099–DIV
1099–G
1099–H
1099–INT
1099–LTC
1099–MISC
1099–OID
1099–PATR
1099–Q
1099–R
1099–S
1099–SA
5498
5498–ESA
5498–SA
W–2G
250ormoreofanyof these forms require electronic or magnetic media filing with IRS. These are
stand-alone documents and may not be aggregated for purposes of determining the 250 threshold. For
example, if you must file 100 Forms 1099–B and 300 Forms 1099–INT, Forms 1099–B need not be filed
electronically or magnetically since they do not meet the threshold of 250. However, Forms 1099–INT
must be filed electronically or magnetically since they meet the threshold of 250.
.06The above requirements do not apply if the payer establishes undue hardship (See Part E, Sec. 5).
Sec. 5. Vendor List
.01IRS/ECC-MTB prepares a list of vendors whosupport electronic or tapecartridge filing. The Vendor List (Pub. 1582) contains
the names of service bureaus that will produce or submit files forelectronic filing or on tape cartridges. It also contains the names
of vendors who provide software packages for payers who wish to produce electronic files or tape cartridges on their own computer
systems. This list is compiled as a courtesy and in no way implies IRS/ECC-MTB approval or endorsement.
.02If filers engage a service bureau to prepare files on their behalf, the filers must not report duplicate data, which may cause
penalty notices to be generated.
.03The Vendor List, Publication 1582, is updated periodically. The most recent revision is available on the IRS website at
w
ww.irs.gov. For an additional list of software providers, log on to www.irs.govandgototheApprovedIRSe-fileforBusiness
Providerslink.
.04A vendor, who offers a software package, or has the capability to electronically file information returns, or has the ability
to produce tape cartridges for customers, and who would like to be included in Publication 1582 must submit a letter or email to
IRS/ECC-MTB. The request should include:
(a)Company name
(b)Address (include city, state, and ZIP code)
(c)Telephone and FAX number (include area code)
(d)Email address
(e)Contact person
(f)Type(s) of service provided (e.g.,service bureau and/or software)
(g)Type(s) of media offered (e.g., tape cartridge, or electronic filing)
(h)Type(s) of return(s)
Sec. 6. Form 4419, Application for FilingInformation Returns Electronically
.01Transmitters are required to submit Form 4419, Application forFiling Information Returns Electronically, to request autho-
rization to file information returns with IRS/ECC-MTB. A single Form 4419 should be filed no matter how many types of returns
the transmitter will be submitting electronically. For example,if a transmitter plans to file Forms 1099–INT, one Form 4419 should
be submitted. If, at a later date, another type of form (Forms 1098, 1099, 5498 and W–2G) will be filed, the transmitter should not
submit a new Form 4419.
July 23, 20071492007–30 I.R.B.

Note: EXCEPTIONS – An additional Form 4419 is required for filing each of the following types of returns: Form 1042–S,
Foreign Person’s U.S. Source Income Subject to Withholding, and Form 8027, Employer’s Annual Information Return of Tip
Income and Allocated Tips. See the back of Form 4419 for detailed instructions.
.02Tape cartridge and electronically filed returns may not be submitted to IRS/ECC-MTB until the application has been approved.
Please read the instructions on the back of Form 4419 carefully. Form 4419 is included in the Publication 1220 for the filer’s use.
This form may be photocopied. Additional forms may be obtained by calling1–800–TAX–FORM (1–800–829–3676).The form is
also available on the IRS website atw
ww.irs.gov.
.03Upon approval, a five-character alpha/numeric Transmitter Control Code (TCC) will be assigned and included in an approval
letter. The TCCmustbe coded in the Transmitter “T” Record. IRS/ECC-MTB uses the TCC to identify payer/transmitters and to
track their files through the processing system. The same TCC canbe used regardless of the method of filing. For example, a payer
may send their production data on a tape cartridge and then later file a correction file electronically. The same TCC can be used for
each filing.
.04IRS/ECC-MTB encourages transmitters who file for multiple payers to submit one application and to use the assigned TCC for
all payers. While not encouraged, multiple TCCs can be issued to payers with multiple TINs. Transmitters cannot use more than one
TCC in a file. Each TCC must be reported in separate transmissions if filing electronicallyor on separate media if filing magnetically.
.05If a payer’s files are prepared by a service bureau, the payer may not need to submit an applicationtoobtainaTCC.Some
service bureaus will produce files, code their own TCC in the file, and send it to IRS/ECC-MTB for the payer. Other service bureaus
will prepare the file and return the file to the payer for submission to IRS/ECC-MTB. These service bureaus may require the payer to
obtain a TCC, which is coded in the Transmitter “T” Record. Payers should contact their service bureaus for further information.
.06Form 4419 may be submitted anytime during the year; however, itmustbe submitted to IRS/ECC-MTB at least 30 days before
the due date of the return(s) for current year processing. This allows IRS/ECC-MTB the time necessary to process and respond to
applications. Form 4419 may be faxed to IRS/ECC-MTB at 304–264–5602. In the event that computer equipment or software is not
compatible with IRS/ECC-MTB, a waiver may be requested to file returns on paper documents (See Part E, Sec. 5).
.07Once a transmitter is approved to file electronically/magnetically, it is not necessary to reapplyunless:
(a)The payer has discontinued filing electronically or magnetically for two consecutive years. The payer’s TCC may have
been reassigned by IRS/ECC-MTB. Payers who know that the assigned TCC will no longer be used, are requested to notify
IRS/ECC-MTB so these numbers may be reassigned.
(b)The payer’s files were transmitted in the past by a service bureau using the service bureau’s TCC, but now the payer has
computer equipment compatible with that of IRS/ECC-MTB and wishes to prepare his or her own files. The payer must
request a TCC by filing Form 4419.
.08In accordance with Regulations section 1.6041–7(b), payments by separate departments of a health care carrier to providers of
medical and health care services may be reported on separate returns filed electronically or magnetically. In this case, the headquarters
will be considered the transmitter, and the individual departments of the company filing reports will be considered payers. A single
Form 4419 covering all departments filing electronically should be submitted. One TCC may be used for all departments.
.09Copies of Publication 1220 can be obtained by downloading from the IRS website atw
ww.irs.gov.
.10Ifanyof the information (name, TIN or address) on Form 4419changes, please notify IRS/ECC-MTB in writing so the
IRS/ECC-MTB database can be updated. The email address, m
ccirp@irs.gov, may be used for basic name and address changes. A
change in the method by which information returns are submitted is not information that needs to be updated (e.g., cartridge to elec-
tronic). The transmitter should include the TCC in all correspondence.
.11Approval to file does not imply endorsementby IRS/ECC-MTB of any computer software or of the quality of tax preparation
services provided by a service bureau or software vendor.
Sec. 7. Filing of Information Returns Magnetically and Retention Requirements
.01Form 4804, Transmittal of Information Returns Reported Magnetically, or a computer-generated substitute, must accompany
alltape cartridge shipments except forreplacements, when Form 4804 is not always required (See Part A, Sec. 10).
.02IRS/ECC-MTB allows for the use of computer-generated substitutes for Form 4804. The substitutes must contain all infor-
mation requested on the original forms including the affidavit and signature line. Photocopies areacceptable, however, an original
signature is required. When using computer-generated forms, be sure to clearly mark the tax year being reported. This will eliminate
a telephone communication from IRS/ECC-MTB to verify the tax year.
.03Form 4804 may be signed by the payer or the transmitter, servicebureau, paying agent, or disbursingagent (all hereafter referred
to as agent) on behalf of the payer. Failureto sign the affidavit on Form 4804 may delayprocessing or could result in the files not
being processed. An agent may sign Form 4804 if the agent has the authority to sign the affidavit under an agency agreement (either
oral, written, or implied) that is valid under state law and adds the caption “FOR: (name of payer).”
.04Although an authorized agent may sign the affidavit, the payer is responsible for the accuracyof Form 4804 and the returns
filed. The payer will be liable for penalties for failure to comply with filing requirements.
2007–30 I.R.B.150July 23, 2007

.05Current and prior year data may be submitted in the same shipment; however, each tax year must be on separate media, and a
separate Form 4804 must be prepared to clearly indicate each tax year.
.06Filers who have prepared their information returns in advance of the due date are encouraged to submit this information to
IRS/ECC-MTB no earlier than January 1 of the year the returns are due. Filers may submit multiple original files by the due date as
long as duplicate information is not reported.
.07 Do not report duplicate information. If a filer submits returns electronically or magnetically, identical paper documents
must not be filed. This may result in erroneous penalty notices being sent to the recipients.
.08A self-adhesive external media label, created by the filer, must be affixed to each tape cartridge. For instructions on how to
prepare an external media label, refer to Notice 210 in the forms section of this publication.
.09When submitting files on tape cartridges include the following:
(a)AsignedForm 4804
(b)External media label (created by filer) affixed to the tape cartridge
(c)IRB Box
oflabeled on outside of each package
.10IRS/ECC-MTB will not return media afterprocessing. Therefore, if the transmitter wants proof that IRS/ECC-MTB received
a shipment, the transmitter should select a service with tracking capabilities or one that will provide proof of delivery. Shipping
containers will not be returned to the filer.
.11IRS/ECC-MTB will not pay for or accept “Cash-on-Delivery” or “Charge to IRS” shipments of tax information that an indi-
vidual or organization is legally required to submit.
.12 Payers should retain a copy of the information returns filed with IRS or have the ability to reconstruct the data for at
least 3 years from the reporting due date, except:
(a)Retain for 4 years all information returns when backup withholding is imposed.
(b)A financial entity must retain a copy of Form 1099–C, Cancellation of Debt, or have the ability to reconstruct the data
required to be included on the return, for at least 4 years from the date such return is required to be filed.
Sec. 8. Due Dates
.01The due dates for filing paper returns with IRS also apply to t
ape cartridges. Filing of information returns is on a calendar year
basis, except for Forms 5498, 5498–ESA and 5498–SA, which are us
ed to report amounts contributed during or after the calendar
year (but not later than April15). The following due dates will
apply to Tax Year2007:
Due Dates
Electronic FilingTape Cartridge Filing (See Note.)
Forms 1098, 1099, and W–2G
Recipient Copy – January 31, 2008
IRS Copy – March 31, 2008
Forms 1098, 1099, and W–2G
Recipient Copy – January 31, 2008
IRS Copy – February 28, 2008
Electronic/Tape Cartridge Filing
Forms 5498*, 5498–SA and 5498–ESA
IRS Copy – June 2, 2008
Forms 5498 and 5498–SA Participant Copy – June 2, 2008
Form 5498–ESA Participant Copy – April 30, 2008
* Participants’ copies of Forms 5498 to furnish fair market value information — January 31, 2008
.02If any due date falls on a Saturday, Sunday, or legal holiday, the return or statement is considered timely if filed or furnished
on the next day that is not a Saturday, Sunday, or legal holiday.
.03Tape cartridges postmarked by the United States Postal Service (USPS) on or before February 28, 2008, and delivered by United
States mail to the IRS/ECC-MTB after the due date, are treated as timely under the “timely mailing as timely filing” rule.Refer to
the2007 General Instructions for Forms 1099, 1098, 5498, and W–2G,When to File, located in the back of this publication for
more detailed information.Notice 97–26, 1997–1 C.B. 413, provides rules for determining the date that is treated as the postmark
date. For items delivered by a non-designated Private Delivery Service (PDS), the actual date of receipt by IRS/ECC-MTB will be
used as the filing date. For items delivered by a designated PDS, but through a type of service not designated in Notice 2004–83,
2004–2 C.B. 1030, the actual date of receipt by IRS/ECC-MTB will be used as the filing date. The timely mailing rule also applies to
furnishing statements to recipients and participants.
July 23, 20071512007–30 I.R.B.

Note: Due to security regulations at ECC-MTB, the Internal Revenue police officers will only accept media from PDSs or
couriers from8:00 a.m. to 3:00 p.m., Monday through Friday.
.04Tape Cartridges must be received by December 1, 2008 in order tobe processed for the current year. After December 1, 2008
the only acceptable method of filing information returns with ECC-MTB will be electronically through the FIRE System. See Part B
for electronic reporting.
Sec. 9. Replacement Tape Cartridges
Note: Replacement Electronic files are detailed
in Part B, Sec. 5.
.01A replacement is an information return file se
nt by the filerat the request of IRS/ECC-MTBbecause of errors encountered
while processing the filer’s original file or cor
rection file. After the necessary changes have been made, the entire file must be returned
for processing along with the Media Tracking Slip
(Form 9267) which was included in the correspondence from IRS/ECC-MTB.(See
Note.)
Note: Filers should never send anything to IRS/ECC-MTB marked “Replacement” unless IRS/ECC-MTB has requested a
replacement file in writing or via the FIRE System.
.02Tape cartridge filers will receive a Media Tracking Slip (Form 9267), listing, and letter detailingthe reason(s) their media could
not be processed. It is imperative that filers maintain backup copies and/or recreate capabilities for their information return files. Open
all correspondence from IRS/ECC-MTB immediately.
.03When possible, sample records identifying errors encountered will be provided with the returned information. It is the respon-
sibility of the transmitter to check the entire file for similar errors.
.04Before sending replacement media make certain the following items are addressed:
(a)Make the required changes noted in the enclosed correspondence and check entire file for other errors.
(b)Enclose Form 9267, Media Tracking Slip, with your replacement media.
(c)Label your media“Replacement Data”and indicate the appropriate Tax Year.
(d)CompleteanewForm4804if any of your information has changed.
.05Replacement files must be corrected and returned to IRS/ECC-MTB within 45 days from the date of the letter.(See Note.)
Refer to Part B, Sec. 5, for procedures for files submitted electronically. A penalty for failure to return a replacement file will be
assessed if the files are not corrected and returned within the 45 daysor if filers are notified by IRS/ECC-MTB of the need for a
replacement file more than two times.A penalty for intentional disregard of filingrequirements will be assessed if a replacement
file is not received. (For penalty information, refer to the Penalty section of the2007 General Instructions for Forms 1099, 1098,
5498, and W–2G.)
Note: Tape Cartridges must be received at IRS/ECC-MTB by December 1, 2008. After December 1, 2008 only electronic files
will be accepted.
Sec. 10. Corrected Returns
•Acorrectionis an information return submitted by the transmitter to correct an information return that was previously submit-
ted to and successfully processed by IRS/ECC-MTB, but contained erroneous information.
•While we encourage you to file your corrections electronically/magnetically, you may file upto 249 paper corrections even
though your originals were filedelectronically or magnetically.
•DO NOT SEND YOUR ENTIRE FILE AGAIN. Only correct the information returns which were erroneous.
•Information returns omitted from the original filemust notbe coded as corrections. Submit these returns under a separate
Payer “A” Record asoriginal returns.
•Be sure to use the same payee account number that was used onthe original submission. The account number is used to match
a correction record to the original information return.
•Before creating your correction file, review the correction guidelines chart carefully.
.01The magnetic media filing requirement of information returns of 250 or more applies separately to both original and corrected
returns.
2007–30 I.R.B.152July 23, 2007

E
X
A
M
P
L
E
If a payer has 100 Forms 1099–A to be corrected, theycan be filed on paper because they fall under the 250
threshold. However, if the payer has 300 Forms 1099–B to be corrected, they must be filed electronically or
magnetically because they meet the 250 threshold. Iffor some reason a payer cannot file the 300 corrections
electronically or magnetically, to avoid penalties, a request for a waiver must be submitted before filing
on paper. If a waiver is approved for original documents, any corrections for the same type of return will
be covered under this waiver.
.02Corrections should be filedas soon as possible. Corrections filed after August 1 may be subject to the maximum penalty of
$50 per return. Corrections filed by August 1 may be subject to a lesser penalty. (For information on penalties, refer to the Penalties
section of the2007 General Instructions for Forms 1099, 1098, 5498, and W–2G.) However, if payers discover errors after August
1, they should file corrections, as prompt correction is a factor considered in determining whether the intentional disregard penalty
should be assessed or whether a waiver of the penalty for reasonable cause may be granted. All fields must be completed with the
correct information, not just the data fieldsneeding correction. Submit corrections only for the returns filed in error, not the entire
file. Furnish corrected statementsto recipients as soon as possible.
Note: Do NOT resubmit your entire file as corrections. This willresult in duplicate filing and erroneous notices may be sent
to payees. Submit only those returns which require correction.
.03There are numerous types of errors, and in some cases, more than one transaction may be required to correct the initial error.
If the original return was filed as an aggregate, the filers must consider this in filing corrected returns.
.04The payee’s account number should be included onallcorrection records. This is especially important when more than one
information return of the same type is reported for a payee. Theaccount number is used to determine which information return is
being corrected. It is vital that each information return reported for a payee have a unique account number. See Part D, Sec. 6, Payer’s
Account Number For Payee.
.05Corrected returns may be included on the same media as original returns; however, separate “A”Records are required. Cor-
rected returns must be identified on Form 4804 and the external medialabel by indicating “Correction.” If filers discover that certain
information returns were omitted on their original file, they must not code these documents as corrections. The file must be coded
and submitted as originals.
.06If a payer realizes duplicate reporting has occurred, IRS/ECC-MTB should be contactedimmediatelyfor instructions on how
to avoid notices. The standard correction process will not resolve duplicate reporting.
.07If a payer discovers errors that affect a large number of payees, in addition to sending IRS the corrected returns and notifying the
payees, IRS/ECC-MTB underreporter section should be contacted toll-free 1–866–455–7438 for additional requirements. Corrections
must be submitted on actual information return documents or filed electronically/magnetically. Form 4804 must be submitted with
corrected files submitted magnetically. If filing magnetically, provide the correct tax year in Block 2 of Form 4804 and on the external
media label. A separate Form 4804 must be submitted for each tax yearreported magnetically. Form 4804 is not required for electronic
filing.
.08Prior year data, original and corrected,mustbe filed according to the requirements ofthis Revenue Procedure. When submitting
prior year data, use the record format for the current year. Each tax year must be submitted on separate media. However, use the actual
year designation of the data in Field Positions 2–5 of the “T”, “A”, and “B” Records. Field position 6, Prior Year Data Indicator, in
the Transmitter ‘T’ Record must contain a ‘P’. If filing electronically, a separate transmission must be made for each tax year.
.09In general, filers should submit corrections for returns filed within the last 3 calendar years (4 years if the payment is a reportable
payment subject to backup withholding under section 3406 of the Code and also for Form 1099–C, Cancellation of Debt).
.10All paper returns, whether original or corrected, must be filed with the appropriate service center.
IRS/ECC-MTB does not
process paper returns.
.11If a payer discovers an error(s) in reporting thepayername and/or TIN, write a letter to IRS/ECC-MTB (See Part A, Sec. 3)
containing the following information:
(a)Name and address of payer
(b)Type of error (please include the incorrect payer name/TIN that was reported)
(c)Tax year
(d)Payer TIN
(e)TCC
(f)Type of return
(g)Number of payees
(h)Filing method, paper, electronic, or tape cartridge
.12The “B” Record provides a 20-position field for a unique Payer’s Account Number for Payee. If a payee has more than one
reporting of the same document type, it is vital that each reporting is assigned a unique accountnumber. This number will help
July 23, 20071532007–30 I.R.B.

identify the appropriate incorrect return if morethan one return is filed for a particular payee.Do not enter a TIN in this field.
A payer’s account number for the payee may be a checking account number, savings account number, serial number, or any other
number assigned to the payee by the payer that will distinguish the specific account. This number should appear on the initial return
and on the corrected return in order to identify and process the correction properly.
.13The record sequence for filing correctionsisthesameasfororiginalreturns.
.14Review the chart that follows. Errors normally fall under oneof the two categories listed. Next to each type of error is a list of
instructions on how to file the corrected return.
Guidelines for Filing Corrected Returns Electronically/Magnetically
Note: References to Form 4804 apply to magnetically filed returns only. Form 4804 is not required for files submitted
electronically through the FIRE System.
One transaction is required to make the following corrections properly. (See Note 3.)
Error Made on the Original ReturnHow To File the Corrected Return
ERRORTYPE1CORRECTION
1.Original return was filed with one or more of the
following errors:
A.Prepare a new Form 4804 that includes information
relating to this new file.
B.Mark “Correction” in Block 1 of Form 4804.
C.Prepare a new file. The first record on the file will be
the Transmitter “T” Record.
D.Make a separate “A” Record for each type of return
and each payer being reported. Payer information in
the “A” Record must be the same as it was in the
original submission.
E.The Payee “B” Records must show the correct record
information as well as a Corrected Return Indicator
Code of “G” in Field Position 6.
F.Corrected returns using“G” coded “B” Records may
be on the same file as those returns submitted without
the “G” coded “B” Records; however, separate “A”
Records are required.
G.Prepare a separate “C” Record for each type of return
and each payer being reported.
H.The last record on the file will be the End of
Transmission “F” Record.
(a)Incorrect payment amount codes in the Payer “A”
Record
(b)Incorrect payment amounts in the Payee “B”
Record
(c)Incorrect code in the distribution code field in
Payee “B” Record
(d)Incorrect payee address(See Note 3.)
(e)Incorrect payee indicator(See Note 1.)
(f)Incorrect payee name(See Notes 2 & 3.)
Note 1: Payee indicators are non-money amount
indicator fields located in the specific form record
layouts of the Payee “B” Record between field
positions 544–748.
Note 2: For information on errors to the payer’s
name and TIN (See Part A, Sec. 10, .11).
Note 3: To correct a TIN and/or payee name and
address follow the instructions under Error Type 2.
I.Indicate “Correction” on the external media label.
File layoutonestep corrections
Transmitter
“T”
Record
Payer
“A”
Record
“G”
coded
Payee “B”
Record
“G”
coded
Payee “B”
Record
End of Payer
“C”
Record
End of
Transmission
“F” Record
2007–30 I.R.B.154July 23, 2007

Guidelines for Filing Corrected Returns Electronically/Magnetically (Continued)
Two (2) separate transactions are required to make the following corrections properly. Follow the directions for both
Transactions 1 and 2. (See Note 5.) DO NOT use the two step correction process to correct money amounts.
Error Made on the Original ReturnHow To File the Corrected Return
ERRORTYPE2CORRECTION
1.Original return was filed with one or more of the
following errors:
Transaction 1:Identify incorrect returns.
A.Prepare a new Form 4804 that includes information
related to this new file.
B.Mark “Correction” in Block 1 of Form 4804.
C.Prepare a new file. The first record on the file will be
the Transmitter “T” Record.
(a)No payee TIN (SSN, EIN, ITIN, QI-EIN)
(b)Incorrect payee TIN
(c)Incorrect payee name and address
(d)Wrong type of return indicator
Note 4: The Record Sequence Number will be
different since this is a counter number and is
unique to each file. For 1099–R corrections, if the
corrected amounts are zeros, certain indicators will
not be used.
D.Make a separate “A” Record for each type of return
and each payer being reported. The information in the
“A” Record will beexactlythe same as it was in the
original submission.(See Note 4.)
E.The Payee “B” Records must containexactly the
sameinformation as submitted previously,except,
insert a Corrected Return Indicator Code of “G” in
Field Position 6 of the “B” Records, and enter “0”
(zeros) in all payment amounts.(See Note 4.)
F.Corrected returns using“G” coded “B” Records may
be on the same file as those returns submitted with
a “C” code;however, separate “A” Records are
required.
G.Prepare a separate “C” Record for each type of return
and each payer being reported.
H.Continue with Transaction 2 to complete the
correction.
Transaction 2:Report the correct information.
A.Make a separate “A” Record for each type of return
and each payer being reported.
B.The Payee “B” Records must show the correct
information as well as a Corrected Return Indicator
Code of “C” in Field Position 6.
C.Corrected returns submitted to IRS/ECC-MTB using
“C” coded “B” Records may be on the same file as
those returns submitted with “G” codes;however,
separate “A” Records are required.
July 23, 20071552007–30 I.R.B.

Guidelines for Filing Corrected Returns Electronically/Magnetically (Continued)
Two (2) separate transactions are required to make the following corrections properly. Follow the directions for both
Transactions 1 and 2. (See Note 5.) DO NOT use the two step correction process to correct money amounts.
Error Made on the Original ReturnHow To File the Corrected Return
ERRORTYPE2CORRECTION
Transaction 2:Report the correct information.
D.Prepare a separate “C” Record for each type of return
and each payer being reported.
E.The last record on the file will be the End of
Transmission “F” Record.
F.Indicate “Correction” on the external media label.
Note 5: See the2007 General Instructions for Forms 1099, 1098, 5498, and W–2Gfor additional information on regulations
affecting corrections and related penalties.
File layouttwostep corrections
Transmitter
“T”
Record
Payer
“A”
Record
“G”
coded
Payee “B”
Record
“G”
coded
Payee “B”
Record
End of Payer
“C”
Record
Payer
“A”
Record
“C”
coded
Payee “B”
Record
“C”
coded
Payee “B”
Record
End of Payer
“C”
Record
End of
Transmission
“F” Record
Note 6: If a filer is reporting “G” coded, “C” coded, and/or “Non-coded” (original) returns onthe same file, each category
must be reported under separate “A” Records.
Sec. 11. Effect on Paper Returns and Statements to Recipients
.01Electronic/Magnetic reporting of information returns eliminates the need to submit paper documents to the IRS.CAUTION:
Do not send Copy A of the paper forms to IRS/ECC-MTB for any forms filed electronically or magnetically.This will result in
duplicate filing; therefore, erroneous notices could be generated.
.02Payers are responsible for providing statements to the payees as outlined in the2007 General Instructions for Forms 1099,
1098, 5498, and W–2G. Refer to those instructions for filing information returns on paper with the IRS and furnishing statements to
recipients.
.03Statements to recipients should be clear and legible. If the official IRS form is not used, the filer must adhere to the specifica-
tions and guidelines in Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W–2G and
1042–S.
Sec. 12. Combined Federal/State Filing Program
•Through the Combined Federal/State Filing (CF/SF) Program, IRS/ECC-MTB will forward original and corrected information
returns filed electronically or magnetically toparticipating states for approved filers.
•For approval, the filer must submit a test file coded for this program. See Part B, Sec. 4, Test Files.
•For tape cartridge test files, attach a letter to Form 4804 requesting approval to participate in the CF/SF Program. Form 4804
or letter is not required fortests sent electronically.
2007–30 I.R.B.156July 23, 2007

•Approved filers are sent Form 6847, Consent for Internal Revenue Service to Release Tax Information, which must be com-
pleted and returned to IRS/ECC-MTB. A separate form is required for each payer.
.01The Combined Federal/State Filing (CF/SF) Program was established to simplify information returns filing for the taxpayer.
IRS/ECC-MTB will forward this information to participating states free of charge for approved filers. Separate reporting to those
states is not required. The following information returns may be filed under theCombined Federal/State Filing Program:
Form 1099–DIVDividends and Distributions
Form 1099–GCertain Government Payments
Form 1099–INTInterest Income
Form 1099–MISCMiscellaneous Income
Form 1099–OIDOriginal Issue Discount
Form 1099–P
ATR
Taxable Dis
tributions Received From Cooperatives
Form 1099–RDistributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,
Insurance Contracts, etc.
Form 5498IRA Contribution Information
.02To request approval to participate, a tapecartridge test file coded for this programmustbe submitted to IRS/ECC-MTB between
November l, 2007, and December 15, 2007.Media must bepostmarkedno later than December 1, 2007 in order to be received at
ECC-MTB by December 15 for processing. Electronic test files coded for this program must be submitted betweenNovember 1, 2007,
andFebruary 15, 2008.
.03Attach a letter to Form 4804 submitted with the test file to indicate the filer is requesting approval to participate in the Combined
Federal/State Filing Program. Test files sent electronically do not require Form 4804 or letter. If the test file is coded for the Combined
Federal/State Filing Program and is acceptable, an approval letter and Form 6847, Consent for Internal Revenue Service to Release
Tax Information, will be sent to the filer.
.04Form 6847, Consent for Internal Revenue Service to Release Tax Information,mustbe completed and signed by the payer, and
returned to IRS/ECC-MTB before any tax information can be released to the state. Filers must write their TCC on Form 6847.
.05While a test file is only required for the first year when a filer applies to participate in the Program, it is highly recommended
that a test be sent every year you participate in the Combined Federal/State Filing program. Each record, both in the test and the actual
data file, must conform to the current Revenue Procedure.
.06If the test file is not acceptable, IRS/ECC-MTB will send tape cartridge filers information indicating the problems. Electronic
filers must log on to the FIRE System within two business days to check the acceptability of their test file. The new test file must be
postmarked no later than December 1, 2007 for tape cartridges, or transmitted by February 15, 2008 for an electronically filed test.
.07A separate Form 6847 isrequiredfor each payer. A transmitter may not combine payers on one Form 6847 even if acting as
Attorney-in-Fact for several payers. Form6847 may be computer-generated as long as it includes all information on the original form,
or it may be photocopied. If Form 6847 is signed by an Attorney-in-Fact, the written consent from the payer must clearly indicate that
the Attorney-in-Fact is empowered to authorize release of the information.
.08Only code the records for participating states and for those payers who have submitted Form 6847.
.09If a payee has a reporting requirement for more than one state,separate “B” records must be created for each state. Payers must
pro-rate the amounts to determine what should be reported to each state. Donotreport the total amount to each state. This will cause
duplicate reporting.
.10Some participating states require separate notification thatthepayerisfilinginthismanner. SinceIRS/ECC-MTBactsasa
forwarding agent only, it is the payer’sresponsibility to contact the appropriate states for further information.
.11All corrections properly coded for the Combined Federal/State Filing Program will be forwarded to the participating states.
Only send corrections which affect the Federal reporting. Errors which apply only to the state filing requirement should be sent directly
to the state.
.12Participating states and corresponding valid state codes are listed inTable 1of this section. The appropriate state codemust
be entered for those documents that meet the state filing requirements;do not use state abbreviations.
.13Each state’s filing requirements are subject to change by the state. It is the payer’s responsibility to contact the participating
states to verify their criteria.
.14Upon submission of the actual files, the transmittermustbe sure of the following:
(a)All records are coded exactly as required by this Revenue Procedure.
(b)A State Total “K” Record(s) for each state(s)being reported follows the “C” Record.
(c)Payment amount totals and the valid participating statecode are included in the State Totals “K” Record(s).
(d)The last “K” Record is followed by an “A” Record or an End of Transmission “F” Record (if this is the last record of the
entire file).
July 23, 20071572007–30 I.R.B.

Table 1. Participating States and Their Codes *
StateCodeStateCodeStateCode
Alabama01Indiana18Nebraska31
Arizona04Iowa19NewJersey34
Arkansas05Kansas20New Mexico35
California06Louisiana22North Caroli
na
37
Colorado07Maine23North Dakota38
Connecticut08Maryland24Ohio39
Delaware10Massachusetts25South Carolina45
District of Columbia11Minnesota27Utah49
Georgia13Mississippi28Virginia51
Hawaii15Missouri29Wisconsin55
Idaho16Montana30
* The codes listed above are correct for the IRS Combined Federal/State Filing Program and may not correspond to the
state codes of other agencies or programs.
Sample File Layout for Combined Federal/State Filer
Transmitter
“T”
Record
Payer
“A”
Record coded
with 1 in
position 26
Payee “B”
Record with
statecode15
in position
747–748
Payee “B”
Record with
statecode06
in position
747–748
Payee “B”
Record, no
state code
End of Payer
“C” Record
State Total “K” Record
for “B” records coded 15.
“K” record coded 15 in positions
747–748.
State Total “K” Record
for “B” records coded 06.
“K” record coded 06 in positions
747–748.
End of Transmission “F”
Record
Sec. 13. Penalties Associated With Information Returns
.01The following penalties generally apply to the person required to file information returns. The penalties apply to electronic/mag-
netic media filers as well as to paper filers.
.02 Failure To File Correct Information Returns by the Due Date (Section 6721).If you fail to file a correct information return
by the due date and you cannot show reasonable cause, you may be subject to a penalty. The penalty applies if you fail to file timely,
you fail to include all information required to be shown on a return, or you include incorrect information on a return. The penalty also
applies if you file on paper when you were required to file either electronically or magnetically, you report an incorrect TIN or fail to
report a TIN, or you fail to file paper forms that are machine readable.
The amount of the penalty is based on when you file the correct information return. The penalty is:
•$15per information return if you correctly file within 30 days of the due date of the return (See Part A, Sec. 8, .01); maximum
penalty $75,000 per year ($25,000 for small businesses).
•$30per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $150,000
per year ($50,000 for small businesses).
•$50per information return if you file after August 1 or you do not file required information returns; maximum penalty $250,000
per year ($100,000 for small businesses).
.03A late filing penalty may be assessed for a replacement file which is not returned by the required date. Depending on your
method of reporting, replacement files may be subject to penalty. See Part A, Sec. 9, or Part B, Sec. 5, .06 for more information on
replacement files.
2007–30 I.R.B.158July 23, 2007

.04 Intentional disregard of filing requirements.If failure to file a correct information return is due to intentional disregard of
the filing or correct information requirements, the penalty isat least $100 per information return with no maximum penalty.
.05 Failure To Furnish Correct Payee Statements (Section 6722).For information regarding penalties which may apply to
failure to furnish correct payee statements, see2007 General Instructions for Forms 1099, 1098, 5498, and W–2G.
Sec. 14. State Abbreviations
.01The following state and U.S. territory abbreviations are to be used when developing the state code portion of address fields. This
table provides state and territory abbreviations only, and does not represent those states participating in the Combined Federal/State
Filing Program.
StateCodeStateCodeStateCode
AlabamaALKentuckyKYNo. Mariana IslandsMP
AlaskaAKLouisianaLAOhioOH
American SamoaASMaineMEOklahomaOK
ArizonaAZMarshall IslandsMHOregonOR
ArkansasARMarylandMDPennsylvaniaPA
CaliforniaCAMassachusettsMAPuerto RicoPR
ColoradoCOMichiganMIRhode IslandRI
Connectic
ut
CTMinnesotaMNSouth Caro
lina
SC
DelawareDEMississippiMSSouth DakotaSD
District of ColumbiaDCMissouriMOTennesseeTN
Federated States of Micronesia FMMontanaMTTexasTX
FloridaFLNebraskaNEUtahUT
GeorgiaGANevadaNVVermontVT
GuamGUNew Hamp
shire
NHVirgini
a
VA
HawaiiHINew JerseyNJ(U.S.) Virgin IslandsVI
IdahoIDNew MexicoNMWashingtonWA
IllinoisILNew YorkNYWest VirginiaWV
IndianaINNorth CarolinaNCWisconsinWI
IowaIANorth DakotaNDWyomingWY
Kansa
s
KS
.02Filers must adhere to the city, state, and ZIP Code format for U.S. addresses in the “B” Record. This also includes American
Samoa, Federated States of Micronesia, Guam, Marshall Islands, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
.03For foreign country addresses, filers may use a 51 position free format which should include city, province or state, postal code,
and name of country in this order. This is allowable only if a “1” (one) appears in the Foreign Country Indicator, Field Position 247,
of the “B” Record.
.04When reporting APO/FPO addresses, use the following format:
EXAMPLE:
Payee NamePVT Willard J. Doe
Mailing AddressCompany F, PSC Box 100
167 Infantry REGT
Pay
ee City
APO
(or FPO)
Payee StateAE, AA, or AP*
Payee ZIP Code098010100
*A
E is the designation for ZIPs beginning with 090–098, AA for ZIP 340, and AP for ZIPs 962–966.
July 23, 20071592007–30 I.R.B.

Sec. 15. Major Problems Encountered
IRS/ECC-MTB encourages filers to verify the format and content of each type of record to ensure the accuracy of the data. This
may eliminate the need for IRS/ECC-MTB to request replacement files. This may be important for those payers who have either had
their files prepared by a service bureau orwho have purchased software packages.
Filers who engage a service bureau to prepare media on their behalf should be careful not to report duplicate data, which
may generate penalty notices.
The Major Problems Encountered lists some of the problems most frequently encounteredwith electronic/magnetic files submitted
to IRS/ECC-MTB. These problems may result inIRS/ECC-MTB requesting replacement files.
1. Unable to read tape cartridge.
Please review all tape cartridge specifications carefully (See Part C, Sections 1 and 2.)
2. No Form 4804, Transmittal of Information Returns Reported Magnetically
Each shipment of media sent to IRS/ECC-MTB must include asignedForm 4804.
3. Discrepancy Between IRS/ECC-MTB Totals and Totals in Payer “C” Records
The “C” Record is a summary record for a type of return for agiven payer. IRS compares the total number of payees and
payment amounts in the “B” records with totals in the “C” Records. The two totalsmustagree. DoNOTenter negative amounts
except when reporting Forms 1099–B or 1099–Q. Money amounts mustbe all numeric, right-justified and zero (0) fill unused
positions.Do Not Use Blanks.
4. The Payment Amount Fields in the “B” Record Do Not Correspond to the Amount Codes in the “A” Record.
The Amount Codes used in the “A” recordMUSTcorrespond with the payment amount fields used in the “B” records. The amount
codes must be left-justified, in ascendingorder with the unused positions blank. For Example: If the “B” records show payment
amounts in payment amount fields 2, 4, and 7, then the “A” record must correspond with 2, 4, and 7 in the amount codes field.
5. Incorrect TIN in Payer “A” Record.
The Payer’s TIN reported in positions 12–20 of the “A” record must be nine numeric characters only.(Do Not Enter Hyphen.)
The TIN and the First Payer Name Line provided in the “A” record must correspond.
6. Incorrect Tax Year in the Transmitter “T” Record, Payer “A” Record and the Payee “B” Records.
The tax year in the transmitter, payer and payee records should reflect the tax year of the information return being reported. For
prior tax year data, there must be a “P” in position 6 of the Transmitter “T” record. Media postmarked December 2, 2007 or
latermusthave the Prior Year Data Indicator coded with a “P” in position 6 of the Transmitter “T” Record. This position must
be blank for current tax year data.
7. Incorrect use of Test Indicator.
When sending a test file, position 28 of the Transmitter“T” record must contain a “T”, otherwise blank fill.
8. Incorrect Format for TINs in the Payee “B” Record.
TINs entered in position 12–20 of the Payee “B” record must consist of nine numerics only.(Do Not Enter Hyphens.)Incorrect
formatting of TINs may result in a penalty.
9. Distribution Codes for Form1099–R Reported Incorrectly.
For Forms 1099–R, there must be valid Distribution Code(s) inposition 545–546 of the Payee “B” record. For valid codes (and
combinations), see Guide to Distribution Codes in Part D. If only one distribution code is required, it must be entered in position
545 and position 546 must be blank. A blank in position 545 is not acceptable.
10. Incorrect Record Totals Listed on Form 4804.
The Combined Total Payee Records listed on Form 4804 (Block 6) are used in the verification process of information returns.
The figure in this blockmustbe the total number of payee “B” records contained on each individual piece of media submitted.
A separate Form 4804 should be sent foreach piece of media that contains a file.
2007–30 I.R.B.160July 23, 2007

11. Missing Correction Indicator in Payee “B” Record.
When a file is submitted as a correction file, there must be acorrection indicator, “G” or “C” in position 6 of the Payee “B”
record. See Part A, Sec. 10.
Part B. Electronic Filing Specifications
Note:The FIRE System DOES NOT provide fill-in forms, except for Form 8809, Application for Extension of Time To File Infor-
mation Returns.Filers must program files according to the Record Layout Specifications contained in this publication. For a
list of software providers, log on to w
ww.irs.govand go to the ApprovedIRSe-fileforBusinessProviderslink.
Sec. 1. General
.01Electronic filing of Forms 1098, 1099, 5498, and W–2G information returns, originals, corrections, and replacements is offered
as an alternative to tape cartridges or paper filing. Filing electronically will fulfill the magnetic media requirements for those payers
who are required to file magnetically. Payers who are under the filing threshold requirement, are encouraged to file electronically.
If the original file was sent magnetically, but IRS/ECC-MTB hasrequested a replacement file, the replacement may be transmitted
electronically. Also, if the original file was submitted via tapecartridge, any corrections may be transmitted electronically.
.02All electronic filing of information returns are received at IRS/ECC-MTB via the FIRE (Filing Information Returns Elec-
tronically) System. To connect to the FIRE System, point your browser to h
ttp://fire.irs.gov. The system is designed to support the
electronic filing of information returns only.
.03The electronic filing of information returns is not affiliated with any other IRS electronic filing programs. Filers must obtain
separate approval to participate in each program. Only inquiries concerning electronic filing of information returns should be directed
to IRS/ECC-MTB.
.04Files submitted to IRS/ECC-MTB electronically must be in standard ASCII code. Do not send tape cartridges or paper forms
with the same information as electronicallysubmitted files. This would create duplicate reporting resulting in penalty notices.
.05The record formats of the “T”, “A”, “B”, “C”, “K”, and “F” records are the same for both electronically or magnetically filed
records. See Part D, Record FormatSpecifications and Record Layouts.
Sec. 2. Advantages of Filing Electronically
Some of the advantages of filing electronically are:
(1)Paperless, no Form 4804 requirements.
(2)Security — Secure Socket Layer (SSL) 128-bit encryption.
(3)The File Status results will be emailed to you in 1–2 business days if the correct email address is provided. It is the filer’s
responsibility to log into the system and check results if the file is bad or you disagree with the count of payees.
(4)Later due date than tape cartridge or paper for electronically filed Forms 1098, 1099, and W–2G (refer to Part A, Sec. 8,
.01).
(5)Allows more attempts than a tape cartridge filing to replace bad files within a specific time frame before imposing penalties
(refer to Part B, Sec. 5, .06).
(6)Better customer service due to on-line availability of transmitter’s files for research purposes.
(7)Extended period to test electronic files: November 1, 2007 to February 15, 2008.
Sec. 3. Electronic Filing Approval Procedure
.01Filers must obtain a Transmitter Control Code (TCC) prior to submitting files electronically. Filers who currently have a TCC
for magnetic media filing may use their assigned TCC for electronic filing. Refer to Part A, Sec. 6, for information on how to obtain
a TCC.
.02Once a TCC is obtained, electronic filers assign their own userID, password and PIN (Personal Identification Number) and do
not need prior or special approval. See Part B, Sec. 6, for more information on the PIN.
.03If a filer is submitting files for more than one TCC, it is notnecessary to create a separate logon and password for each TCC.
.04For all passwords, it is the user’s responsibility to remember the password and not allow the password to be compromised.
Passwords are user assigned at first logon and must be 8 alpha/numerics containing at least 1 uppercase, 1 lowercase, and 1 numeric.
However, filers who forget their password or PIN, can calltoll-free 1–866–455–7438 extension 3for assistance. The FIRE System
may require users to change their passwords on a yearly basis.
July 23, 20071612007–30 I.R.B.

Sec. 4. Test Files
.01Filers are not required to submit a test file; however, the submission of a test file is encouraged for all new electronic filers to
test hardware and software. If filers wish to submit an electronic test file for Tax Year2007(returns to be filed in2008), itmustbe
submitted to IRS/ECC-MTBno earlier thanNovember 1, 2007, andno later thanFebruary 15, 2008.
.02Filers who encounter problems while transmitting the electronic test file can contact IRS/ECC-MTBtoll-free 1–866–455–7438
extension 3for assistance.
.03Within 1–2 days after your file has been sent, you will be notified via email as to the acceptability of your file if you provide
a valid email address on the ‘Verify Your Filing Information’ screen. If the file is bad, the filer must return to h
ttp://fire.irs.govto
determine what the errors are in the file by clicking on CHECK FILE STATUS. If your results indicate:
(a) “Good, Federal Reporting”— Your test file is good for federal reporting only. Click on the filename for additional details.
(b) “Good, Federal/State Reporting”— Your file is good for the Combined Federal and State Filing Program (see Part A,
Section 12 for further details). Click on the filename for additional details.
(c) “Bad”— This means that your test file contained errors. Click on the filename for a list of the errors. If you want to send
another test file, send it as another test (not a replacement, original or correction).
(d) “Not Yet Processed”— The file has been received, but we do not have results available yet. Please allow another day for
results.
.04Form 4804 is not required for test files submitted electronically. See Part B, Sec. 4.
.05 A test file is required from filers who want approval for the Combined Federal/State Filing Program. See Part A,
Sec. 12, for further details.
Sec. 5. Electronic Submissions
.01Electronically filed information may be submitted to IRS/ECC-MTB 24 hours a day, 7 days a week. Technical assistance is
available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern time by callingtoll-free 1–866–455–7438 extension 3.
.02 The FIRE System will be down from 2 p.m. EST December 20, 2007, through January 2, 2008.This allows IRS/ECC-
MTB to update its system to reflect current year changes.
.03If you are sending files larger than 10,000 records electronically, data compression is encouraged. When transmitting files
larger than 5 million records, please contact IRS/ECC-MTB for additional information. WinZipand PKZIP are the only acceptable
compression packages. IRS/ECC-MTB cannot accept self-extracting zip files or compressed files containing multiple files. The time
required to transmit information returns electronically will vary depending upon the type of connection to the internet and if data
compression is used.The time required to transmit a file can be reduced up to 95 percent by using compression.
.04The FIRE System can accept multiple files forthe same type of return providing duplicate data is not transmitted. For example,
if your company has several branches issuing 1099–INT forms; it isnot necessary to consolidate all the forms into one transmission.
Each file may be sent separately,providing duplicate data is not transmitted.
.05Transmitters may create files using self assigned filename(s). Files submitted electronically will be assigned a new unique file
name by the FIRE System. The filename assigned by the FIRE System will consist of submission type (TEST, ORIG [original], CORR
[correction], and REPL [replacement]), the filer’s TCC and a four-digit number sequence. The sequence number will be incremented
for every file sent. For example, if it is your first original file for the calendar year and your TCC is 44444, the IRS assigned filename
would be ORIG.44444.0001.Record the filename.This information will be needed by ECC-MTB to identify the file, if assistance
is required.
.06If a file was submitted timely and is bad, the filer will have up to 60 days from the day the file was transmitted to transmit an
acceptable file. If an acceptable file is not received within 60 days, the payer could be subject to late filingpenalties. This only applies
to files originally submitted electronically.
.07The following definitions have been provided to help distinguish between a correction and a replacement:
•Acorrectionis an information return submitted by the transmitter to correct an information return that was previously submit-
ted to and processed by IRS/ECC-MTB, but contained erroneous information.(See Note.)
Note: Corrections should only be made to records that have been submitted incorrectly, not the entire file.
•Areplacementis an information return file sent by the filer because the CHECK FILE STATUS option on the FIRE System
indicated the original/correction file wasbad. After the necessary changes have been made, the file must be transmitted through
the FIRE System.(See Note.)
Note: Filers should never transmit anything to IRS/ECC-MTB as a “Replacement” file unless the CHECK FILE STATUS
option on the FIRE System indicates the file is bad.
2007–30 I.R.B.162July 23, 2007

.08The TCC in the Transmitter “T” Record must be the TCC used to transmit the file; otherwise, the file will be considered an
error.
Sec. 6. PIN Requirements
.01Form 4804 is not required for electronic files. Instead, the user will be prompted to create a PIN consisting of 10 numerics
when establishing their initial logon name and password.
.02The PIN is required each time an ORIGINAL, CORRECTION, or REPLACEMENT file is sent electronically and is permission
to release the file. It is not needed for a TEST file. An authorized agent may enter their PIN, however, the payer is responsible for the
accuracy of the returns. The payer will be liable for penalties for failure to comply with filing requirements. If you forget your PIN,
please calltoll-free 1–866–455–7438 extension 3for assistance.
.03If the file is good, it is released for mainline processing after 10 calendar days from receipt. Contact ustoll-free 1–866–455–7438
extension 3within this 10-day period if there is a reason the file should not be released for further processing. If the file is bad, follow
normal replacement procedures.
Sec. 7. Electronic Filing Specifications
.01The FIRE System is designed exclusively for the filing of Forms 1042–S, 1098, 1099, 5498, 8027, and W–2G.
.02A transmitter must have a TCC (see Part A, Sec. 6) before a filecan be transmitted. A TCC assigned for magnetic media filing
should also be used for electronic filing.
.03After 1–2 business days, the results of the electronic transmission will be emailed to you providing you provide an accurate
email address on the ‘Verify Your Filing Information’ screen. If you are using email filtering software, configure your software to
accept emails from f
ire@irs.gov. If after receiving the email it indicates that your file is bad, you must log into the FIRE System and
go to the CHECK FILE STATUS area of the FIRE System to determine what the errors are in your file. Forms 1042–S and 8027
require a longer processing time and emails are not sent for these forms.
Sec. 8. Connecting to the FIRE System
.01Point your browser to http://fire.irs.govto connect to the FIRE System.
.02Filers should turn off their pop-up blockingsoftware before transmitting their files.
.03Before connecting, have your TCC and EIN available.
.04Your browser must support SSL 128-bit encryption.
.05Your browser must be set to receive “cookies”. Cookies are used to preserve your User ID status.
F
irsttimeconnectiontoTheFIRESystem(If you have logged on previously, skip to Subsequent Connections to the FIRE
System.)
Click“Create New Account”.
Fill out the registration form and click“Submit”.
Enter yourUser ID(most users logon with their first and last name).
Enter and verify yourpassword(the password is user assigned and must be 8 alpha/numerics,
containing at least 1 uppercase, 1 lowercase and1numeric).FIREmayrequireyoutochange
the password once a year.
Click“Create”.
If you receive the message“Account Created”,click“OK”.
Enter and
verify your 10-digit self-assigned PIN(Personal Identification Number).
Click“Submit”.
If you receive the message“Your PIN has been successfully created!”,click“OK”.
Read the bulletin(s) and/or“Click here to continue”.
S
ubsequentconnectionstoTheFIRESystem
Click“Log On”.
Enter yourUser ID(most users logon with their first and last name).
Enter yourpassword(the password is user assigned and is case sensitive).
Read the bulletin(s) and/or “Click here to continue”.
July 23, 20071632007–30 I.R.B.

UploadingyourfiletotheFIRESystem
At Menu Options
:
Click“Send Information Returns”
Enter yourTCC:
Enter yourEIN:
Click“Submit”.
The system will then display the company name, address, city, state, ZIP Code, phone number,
contact and email address. This information will beused to email the transmitter regarding their
transmission. Update as appropriate and/or Click“Accept”.
Note: Please ensure that the email is accurate so that the correct person receives the email
and it does not return to us undeliverable. If you are using SPAM filtering software, please
configure it to allow an email from f
ire@irs.gov.
Click one of the following:
Original File
Correction File
Test File(This option will only be available from 11/1/2007 - 02/15/2008.)
Replacement File(if you select this option, select one of the following):
Electronic Replacement(file was originally transmitted on this system)
Click o
n the file to be replaced.
Magnetic Media Replacement
Enter the alpha character from Form9267, Media Tracking Slip, that was
sent with the request for replacement file. Click“Submit”.
Enter your 10-digit PIN (not prompted for this if a test is being sent).
Click“Submit”.
Cli
ck“Browse”to locate the file and open it.
Click“Upload”.
When the upload is complete, the screenwill display the total bytes received and tell you the name of the file you just
uploaded.
If you have more files to upload for that TCC:
Click“File Another?”;otherwise,
Click“Main Menu”.
It is your responsibility to check the acceptability of your file; therefore, be sure to check back into the system in 1–2
business days using the CHECK FILE STATUS option.
CheckingyourFILESTATUS
If the correct email address was provided onthe “Verify Your Filing Information” screen when the file was sent, an email will be
sent regarding your FILE STATUS. If the results in the email indicate “Good, not Released” and you agree with the “Count of
Payees”, then you are finished with this file. If you have any other results, please follow the instructions below.
At the Main Menu:
Click“Check File Status”.
Enter yourTCC:
Enter yourEIN:
Click“Search”.
2007–30 I.R.B.164July 23, 2007

If “Results” in
dicate:
“Good, Not Released”and you agree with the “Count of Payees”, you
are finished with this file. The file will automatically be released after 10
calendar days unless you contact us within this timeframe.
“Good, Released”– File has been released to our mainline processing.
“Bad”–Corre
ct the errors and timely resubmit the file as a “replacement”.
“Not yet processed”– File has been received, but we do not have results
available yet. Please check back in a few days.
Click on the desired file for a detailed report of your transmission.
When you ar
e finished, click onMain Menu.
Click“Log Out”.
Close your Web Browser.
Sec. 9. Common Problems and Questions Associated with Electronic Filing
.01Refer to Part A, Sec. 15, for common format errors associated with electronic/magnetic files.
.02The following are the major errors associated with electronic filing:
N
ON-FORMATERRORS
1. Transmitter does not check the FIRE Systemtodeterminewhythefileisbad.
The results of your file transfer are posted to the FIRE System within two business days. If the correct email address was provided
on the “Verify Your Filing Information” screen when the file was sent, an email will be sent regarding your FILE STATUS. If the
results in the email indicate “Good, not Released” and you agree with the “Count of Payees”, then you are finished with this file.
If you have any other results, please follow the instructions in the Check File Status option. If the file contains errors, you can get
an online listing of the errors. Date received and number of payee records are also displayed. If the file is good, but you do not
want the file processed, you must contact IRS/ECC-MTB within 10 calendar days from the transmission of your file.
2. Incorrect file is not replaced timely.
If your file is bad, correct the file and timely resubmit as a replacement.
3. Transmitter compresses several files into one.
Only c
ompress one file at a time. For example, if you have 10 uncompressed files to send, compress each file separately and
send 1
0 separate compressed files.
4. Transmitter sends a file and CHECK FILE STATUS indicates that the file is good, but the transmitter wants to send a
replacement or correction file to replace the original/correction/replacement file.
Once a file has been transmitted, you cannot send a replacement file unless CHECK FILE STATUS indicates the file is bad
(1–2 business days after file was transmitted). If you do not want us to process the file, you must first contact ustoll-free
1–866–455–7438 extension 3to see if this is a possibility.
5. Transmitter sends an original file that is good, and then sends a correction file for the entire file even though there are
only a few changes.
The correction file, containing the proper coding, should only contain the records needing correction, not the entire file.
6.
File is formatted as EBCDIC.
All files submitted electronicallymust be in standard ASCII code.
July 23, 20071652007–30 I.R.B.

7. Transmitter has one TCC number, but is filing for multiple companies, which EIN should be used when logging
into the system to send the file?
When sending the file electronically, you will need to enter theEIN of the company assigned to the TCC. When you upload the
file, it will contain the EIN’s of the other companies for which you are filing. This is the information that will be passed forward.
8. Transmitte
r sent the wrong file, what should be done?
Call us as soon as possible toll-free at1–866–455–7438 extension 3.We may be able to stop the file before it has been processed.
Please do not send a replacement fora file that is marked as a good file.
Part C. Tape Cartridge Specifications
.01Transmitters should be consistent in the use of recording codesand density on files. If the tape cartridge does not meet these
specifications, IRS/ECC-MTB will request a replacement file. Filers are encouraged to submit a test prior to submitting the actual
file. Contact IRS/ECC-MTBtoll-free 1–866–455–7438 extension 5for further information. Transmitters should also check media
for viruses before submitting to IRS/ECC-MTB.
.02In most instances, IRS/ECC-MTB can process tape cartridges that meet the following specifications:
(a)Must be IBM 3480, 3490, 3490E, 3590, or 3590E.
(b)Must meet American National Standard Institute (ANSI)standards, and have the following characteristics:
(1)Tape cartridges must be
1
/2-inch tape contained in plastic cartridges that areapproximately 4-inches by 5-inches by 1-inch
in dimension.
(2)Magnetic tape must be chromium dioxide particle based
1
/2-inch tape.
(3)Cartridges must be 18-track, 36-track, 128-track or 256-track parallel(See Note.)
(4)Cartridges will contain 37,871 CPI, 75,742 CPI, or 3590 CPI (characters per inch).
(5)Mode will be full function.
(6)The data may be compressed using EDRC (Memorex) or IDRC (IBM) compression.
(7)Either EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Information
Interchange) may be used.
.03The tape cartridge records definedin this Revenue Procedure may be blocked subject to the following:
(a)Ablockmust notexceed 32,250 tape positions.
(b)If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9s;
however, the last block of the file may be filled with 9s or truncated.Do not pad a block with blanks.
(c)All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any control fields
or block descriptor fields, which describe the length of the block or the logical records within the block. The number of
logical records within a block (the blocking factor) must be constant in every block with the exception of the last block,
which may be shorter (see item (b) above). Theblock length must be evenly divisible by 750.
(d)Records may not span blocks.
.04Tape cartridges may be labeled or unlabeled.
.05Donotsend encrypted data.
.06For the purposes of this Revenue Procedure, the following must be used:
Tape Mark:
(a)Signifies the physical end of the recording on tape.
(b)For even parity, use BCD configuration 001111 (8421).
(c)May follow the header label and precede and/or follow the trailer label.
Note: Filers should indicate on the external media label whether the cartridge is 18-track, 36-track, 128-track or 256-track.
Part D. Record Format Specifications and Record Layouts
Sec. 1. General
.01The specifications contained in this part of the Revenue Procedure define the required formation and contents of the records to
be included in the electronic or tape cartridge files.
.02A provision is made in the “B” Records for entries which are optional. If the field is not used, enter blanks to maintain a fixed
record length of 750 positions. Each field descriptionexplains the intended use of specific field positions.
2007–30 I.R.B.166July 23, 2007

Sec. 2. Transmitter “T” Record — General Field Descriptions
.01The Transmitter “T” Record identifies the entity transmitting the electronic/tape cartridge file and contains information which
is critical if it is necessary for IRS/ECC-MTB to contact the filer.
.02The Transmitter “T” Record is the first record on each file and is followed by a Payer “A” Record. A file format diagram is
located at the end of Part D. A replacement file will be requested by IRS/ECC-MTB if the “T” Record is not present.
.03For all fields marked“Required”, the transmitter must provide the information described under Description and Remarks.
For those fields not marked“Required”, a transmitter must allow for the field but may be instructed to enter blanks or zeros in the
indicated field positions and for the indicated length.
.04All records must be a fixed length of 750 positions.
.05All alpha characters entered in the “T”Record must be upper-case, except emailaddresses which may be case sensitive.Do
notuse punctuation in the name and address fields.
Record Name: Transmitter “T” Record
Field
Position
Field TitleLength Description and Remarks
1Record Type1Required.Enter “T”.
2–5Payment Year4Required.Enter “2007”. If reporting prior year data, report the year which
applies (2005, 2006, etc.) and set the Prior Year Data Indicator in field position 6.
6Prior Year Data
Indicator
1Required.Enter “P”onlyif reporting prior year data; otherwise, enter blank.
Do not enter a “P” if tax year is2007.(See Note.)
Note: Current year data MAILED December 2 or later or electronic files SENT December 21 or later must be coded with
a “P”. Current year processing ends in December and programs are converted for the next processing year.
7–15Transmitter’s TIN9Required.Enter the transmitter’s nine-digitTaxpayer Identification Number
(TIN). May be an EIN or SSN.
16–20Transmitter Control
Code
5Required.Enter the five-character alpha/numeric Transmitter Control Code
(TCC) assigned by IRS/ECC-MTB. A TCCmust be obtained to file data with
this program.
21–27Blank7Enter blanks.
28Test File
Indicator
1Required for test files only. Enter a “T” if this is a test file; otherwise, enter
a blank.
29Foreign Entity
Indicator
1Enter a “1” (one) if the transmitter is a foreign entity. If the transmitter is not a
foreign entity, enter a blank.
30–69Transmitter Name40Required.Enter the name of the transmitter in the manner in which it is used in
normal business. Left-justify and fill unused positions with blanks.
70–109Transmitter Name
(Continuation)
40Required.Enter any additional information that may be part of the name.
Left-justify information and fill unused positions with blanks.
110–149Company Name40Required.Enter the name of the company to be associated with the address
where correspondence should be sent.
150–189Company Name
(Continuation)
40Enter any additional information that may be part of the name of the company
where correspondence should be sent.
190–229Company Mailing
Address
40Required.Enter the mailing address where correspondence should be sent.
Note: Any correspondence relating to problem media or electronic files will be sent to this address. This should be
the same address as in box 5 of Form 4804.
For U.S. addresses,the payer city, state, and ZIP Code must be reported as a 40, 2, and 9-position field, respectively.Filers must
adhere to the correct format for the payer city, state, and ZIP Code. For foreign addresses,filers may use the payer city, state,
and ZIP Code as a continuous 51-position field. Enter information in the following order: city, province or state, postal code, and
the name of the country. When reporting a foreign address, the Foreign Entity Indicator in position 29 must contain a “1” (one).
July 23, 20071672007–30 I.R.B.

Record Name: Transmitter“T” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
230–269Company
City
40Required.Enter the city, town, or post office where correspondence should
be sent.
270–271Company
State
2Required.Enter the valid U.S. Postal Service state abbreviation. Refer to the
chart for valid state codes in Part A, Sec. 14.
272–280Company
ZIP Code
9Required.Enter the valid nine-digit ZIP assigned by the U.S. Postal Service.
If only the first five-digits are known, left-justify information and fill unused
positions with blanks.
281–295Blank15Enter blanks.
296–303Total Number
of Payees
8Enter the total number of Payee “B” Records reported in the file. Right-justify
information and fill unused positions with zeros.
304–343Contact Name40Required.Enter the name of the person to be contacted if IRS/ECC-MTB
encounters problems with the file or transmission.
344–358Contact Phone
Number &
Extension
15Required.Enter the telephone number of the person to contact regarding
electronic or magnetic files. Omit hyphens. If no extension is available,
left-justify information and fill unused positions with blanks. For example, the
IRS/ECC-MTB Customer Service Section phone number of866–455–7438with
an extension of52345would be866455743852345.
359–408Contact Email
Address
50Required if available.Enter the email address of the person to contact regarding
electronic or magnetic files. Left-justify information. If no email address is
available, enter blanks.
409–410Cartridge Tape
File Indicator
2Required for tape cartridge filers only.Enter the letters “LS” (in uppercase
only). Use of this field by filers using other types of media will be acceptable
but is not required.
411–416Transmitter’s Media
Number
6For tape cartridge filers only. If your organization uses an in-house numbering
system to identify tape cartridges, enter that number; otherwise, enter blanks.
417–499Blank83Enter blanks.
500–507Record Sequence
Number
8Required.Enter the number of the record as it appears within your file. The
record sequence number for the “T” record will always be “1” (one), since it is
the first record on your file and you can have only one “T” record in a file.
Each record, thereafter, must be incremented by one in ascending numerical
sequence, i.e., 2, 3, 4, etc. Right-justify numbers with leading zeros in the field.
For example, the “T” record sequence number would appear as “00000001”
in the field, the first “A” record would be “00000002”, the first “B” record,
“00000003”, the second “B” record, “00000004” and so on until you reach the
final record of the file, the “F” record.
508–517Blank10Enter blanks.
518Vendor Indicator1Required.Enter the appropriate code from the table below to indicate if your
software was provided by a vendor or produced in-house.
IndicatorUsage
VYour software was purchased from a
vendor or other source.
IYour software was produced by
in-house programmers.
Note: In-house programmer is defined as an employee or a hired contract programmer. If your software is produced
in-house, the following Vendor information fields are not required.
2007–30 I.R.B.168July 23, 2007

Record Name: Transmitter“T” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
519–558Vendor Name40Required.Enter the name of the company from whom you purchased your
software.
559–598Vendor Mailing
Address
40Required.Enter the mailing address.
ForU.S.addresses, the vendor city, state, and ZIP Code must be reported as a 40, 2, and 9-position field, respectively.Filers
must adhere to the correct format for the payer city, state, and ZIP Code.
For foreign addresses,filers may use the payer city, state, and ZIP Code as a continuous 51-position field. Enter information in
the following order: city, province or state, postal code, and the name of the country.
599–638Vendor City40Required.Enter the city, town, or post office.
639–640Vendor State2Required.Enter the valid U.S. Postal Service state abbreviation. Refer to the
chart of valid state codes in Part A, Sec. 14.
641–649Vendor ZIP Code9Required.Enter the valid nine-digit ZIP Code assigned by the U.S. Postal
Service. If only the first five-digits are known, left-justify information and fill
unused positions with blanks.
650–689Vendor Contact Name40Required.Enter the name of the person whocan be contacted concerning any
software questions.
690–704Vendor Contact
Phone Number
& Extension
15Required.Enter the telephone number of the person to contact concerning
software questions. Omit hyphens. If no extension is available, left-justify
information and fill unused positions with blanks.
705–739Blank35Enter Blanks.
740Vendor Foreign
Entity Indicator
1Enter a “1” (one) if the vendor is a foreign entity. Otherwise, enter a blank.
741–748Blank8Enter blanks.
749–750Blank2Enter blanks or carriage return/line feed characters (CR/LF).
Sec. 3. Transmitter “T” Record — Record Layout
Record
Type
Payment
Year
Prior Year
Data
Indicator
Transmitter’s
TIN
Transmitter
Control
Code
Blank
12–567–1516–2021–27
Test File
Indicator
Foreign
Entity
Indicator
Transmitter
Name
Transmitter
Name
(Continuation)
Company
Name
Company
Name
(Continuation)
282930–6970–109110–149150–189
Company
Mailing
Address
Company
City
Company
State
Company
ZIP
Code
BlankTotal
Number
of Payees
Contact
Name
190–229230–269270–271272–280281–295296–303304–343
July 23, 20071692007–30 I.R.B.

Contact
Phone
Number &
Extension
Contact
Email
Address
Cartridge
Tape File
Indicator
Transmitter’s
Media Number
BlankRecord
Sequence
Number
344–358359–408409–410411–416417–499500–507
BlankVendor
Indicator
Vendor
Name
Vendor
Mailing
Address
Vendor
City
Vendor
State
508–517518519–558559–598599–638639–640
Vendor ZIP
Code
Vendor
Contact
Name
Vendor
Contact
Phone
Number &
Extension
BlankVendor
Foreign
Entity
Indicator
BlankBlank or
CR/LF
641–649650–689690–704705–739740741–748749–750
Sec. 4. Payer “A” Record — General Field Descriptions
.01The Payer “A” Record identifies the person making payments, a recipient of mortg
age or student loan interest payments, an
educational institution, a broker, a person reporting a real estate transaction, a
barter exchange, a creditor, a trustee or issuer of any
IRA or MSA plan, and a lender who acquires aninterestinsecuredpropertyorwhohasa
reason to know that the property has been
abandoned. The payer will be held responsible for the completeness, accuracy, an
d timely submission of electronic/magnetic files.
.02The second record on the file must be an “A” Record. A transmitter may include Pa
yee “B” records for more than one payer
in a file. However,each groupof “B” records must be preceded by an “A” Record and fo
llowed by an End of Payer “C” Record. A
single file may contain different types of returns but the types of returnsmust n
otbe intermingled. A separate “A” Record is required
for each payer and each type of return being reported.
.03The number of “A” Records depends on the number of payers and the different typ
es of returns being reported. Do not submit
separate “A” Records for each payment amount being reported. For example, if a p
ayer is filing Form 1099–DIV to report Amount
Codes 1, 2, and 3, all three amount codes should be reported under one “A” Record,
not three separate “A” Records.
.04The maximum number of “A” Records allowed on a file is 90,000.
.05All records must be a fixed length of 750 positions.
.06All alpha characters entered inthe “A” Record must be upper case.
.07For all fields marked“Required”, the transmitter must provide the informa
tion described under Description and Remarks.
For those fields not marked“Required”, a transmitter must allow for the field
, but may be instructed to enter blanks or zeros in the
indicated media position(s) and for the indicated length.
Record Name: Payer “A” Record
Field
Position
Field TitleLength Description and Remarks
1Record Type1Required.Enter an “A”.
2–5Payment Year4Required.Enter “2007”. If reporting prior year data, report the year which applies
(2005, 2006, etc.).
6–11Blank6Enter blanks.
12–20Payer’s
Taxpayer
Identification
Number (TIN)
9Required.Must be the valid nine-digit Taxpayer Identification Number assigned to
the payer.Do not enter blanks, hyphens, or alpha characters.All zeros, ones,
twos, etc., will have the effect of an incorrect TIN.
2007–30 I.R.B.170July 23, 2007

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
Note: For foreign entities that are not required to have a TIN, this field must be blank. However, the Foreign Entity
Indicator, position 52 of the “A”Record, must be set to “1”(one).
21–24Payer Name
Control
4The Payer Name Control can be obtained only from the mail label on the Package
1099 that is mailed to most payers each December. Package 1099 contains Form
7018–C, Order Blank for Forms, and the mail label on the package contains a
four (4) character name control. If a Package 1099 has not been received, you can
determine your name control using the following simple rules or you can leave the
field blank. For a business, use the first four significant characters of the business
name. Disregard the word “the” when it is the first word of the name, unless there
are only two words in the name. A dash (-) and an ampersand (&) are the only
acceptable special characters. Names of less than four (4) characters should be
left-justified, filling the unused positions with blanks.
25Last Filing
Indicator
1Enter a “1” (one) if this is thelast yearthis payer name and TIN will file information
returns electronically, magnetically or on paper; otherwise, enter blank.
26Combined
Federal/State
Filer
1Required for the Combined Federal/State Filing Program.Enter“1”(one)if
approved or submitting a test to participate in the Combined Federal/State Filing
Program; otherwise, enter a blank.
Note: If the Payer “A” Record is coded for combined Federal/State filing there must be coding in the Payee “B” Records
and the State Totals “K” Records.
Note: If you entered “1” (one) in this field position, be sure to code the Payee “B” Records with the appropriate state
code. Refer to Part A, Sec. 12,for further information.
27Type of Return1Required.Enter the appropriate code from the table below:
TypeofReturnCode
10983
1098–CX
1098–E2
1098–T8
1099–A4
1099–BB
1099–C5
1099–CAPP
1099–DIV1
109
9–G
F
1099–HJ
1099–INT6
1099–LTCT
1099–MISCA
1099–OIDD
1
099–PATR
7
1099–QQ
1099–R9
1099–SS
1099–SAM
5498L
5498–ESAV
5498–SAK
W–2GW
July 23, 20071712007–30 I.R.B.

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
28–41Amount Codes
(See Note.)
14Required.Enter the appropriate amount codes for the type of return being reported.
In most cases, the box numbers on paper information returns correspond with the
amount codes used to file electronically or magnetically. However, if discrepancies
occur, this Revenue Procedure governs for filing electronically/magnetically. Enter
the amount codes in ascending sequence; numeric characters followed by alphas.
Left-justify, and fill unused positions with blanks.
Note: A type of return and an amount code must be presentin every Payer “A” Record even if no money amounts are
being reported. For a detailed explanation of the information to be reported in each amount code, refer to the appropriate
paper instructions for each form.
Amount CodesForm 1098—Mortgage
Interest Statement
For Reporting Mortgage Interest Received From Payers/Borrowers (Payer of
Record) on Form 1098:
AmountCodeAmountType
1Mortgage interest received from
payer(s)/borrower(s)
2Points paid on purchase of principal
residence
3Refund (or credit) of overpaid interest
4Mortgage
Insurance Premiums
5Blank (Filer’s use)
Amount C
odesForm 1098–C—
Contrib
utions of Motor Vehicles, Boats,
and Airp
lanes
For Repo
rting Gross Proceeds From Sales on Form 1098–C:
A
mountCodeAmountType
4Gross proceeds from sales
6Value of goods or services in exchange for
vehicle
Amount CodeForm 1098–E— Student
Loan Interest Statement
For Reporting Interest on Student Loans on Form 1098–E:
A
moun
tCode
Amoun
tType
1Student loan interest received by lender
Amount CodesForm 1098–T— Tuition
Statement
For Reporting Tuition Payments on Form 1098–T:
A
mou
ntCode
Amou
ntType
1Payments received forqualified tuition and
related expenses
2Amounts billed for qualified tuition and
related expenses
3Adjustments made for prior year
4Scholarships or grants
5Ad
justmentstoscholarshipsorgrantsfor
ap
rior year
7Reimbursements or refunds of qualified
tuition and related expenses from an
insurance contract
2007–30 I.R.B.172July 23, 2007

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
Note 1: For Amount Codes 1 and 2 enter either payments received OR amounts billed. DO NOT report both.
Note 2: Amount codes 3 and 5 are assumed to be negative. It is not necessary to code with an over punch or dash
to indicate a negative reporting.
Amount CodesForm 1099–A—
Acquisition or Abandonment of Secured
Property
For Reporting the Acquisition or Abandonment of Secured Property on Form
1099–A:
AmountCodeAmountType
2Balance of pr
incipal outstanding
4Fair market value of property
For Reporting Payments on Form 1099–B:Amount CodesForm 1099–B— Proceeds
From Broker and Barter Exchange
TransactionsA
mountCodeAmountType
2Stocks, bonds, etc. (For forward contracts,
See Note 1.)
3Bartering (Do not report negative amounts.)
4Federal income tax withheld (backup
withholding) (Do not report negative
amounts.)
6Profit (or loss) realized in2007(See Note
2.)
7Unrealized profit (or loss) on open contracts
-12/31/2006(See Note 2.)
8Unrealized profit (or loss) on open contracts
-12/31/2007(See Note 2.)
9Aggregate profit (or loss)(See Note 2.)
Note 1: The payment amount field associated with Amount Code 2 may be used to report a loss from a closing transaction
on a forward contract. Refer to the “B” Record – General Field Descriptions and Record Layouts, Payment Amount
Fields, for instructions on reporting negative amounts.
Note 2: Payment Amount Fields 6, 7, 8, and 9 are to be used for the reporting of regulatedfutures or foreign currency
contracts.
For Reporting Payments on Form 1099–C:Amount CodesForm 1099–C —
Cancellation of Debt
A
mountCodeAmountType
2Amount of debt canceled
3Interest, if included in Amount Code 2
7Fair market value of property(See Note.)
Note: Use Amount Code 7 only if a combined Form 1099–A and 1099–C is being filed.
For Reporting Payments on Form 1099–CAP:Amount CodeForm 1099–CAP—
Changes in Corporate Control and Capital
StructureA
mountCodeAmountType
2Aggregate amount received
For Reporting Payments on Form 1099–DIV:Amount CodesForm 1099–DIV—
Dividends and Distributions
A
mountCodeAmountType
1Total ordinary dividends
2Q
ualified dividends
3Total capital gain distribution
July 23, 20071732007–30 I.R.B.

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
AmountCodeAmountType
6Unrecaptured Section 1250 gain
7Section 1202 gain
8Collectibles (28%) rate gain
9Nondividend distributions
AFederal inco
me tax withheld
BInvestment expenses
CForeign tax paid
DCash liquidation distributions
ENon-cash liquidation distributions
For Reporting Payments on Form 1099–G:Amount CodesForm 1099–G—Certain
Government Payments
A
mountCo
de
AmountTy
pe
1Unemployment compensation
2Stateorl
ocal income tax refunds, credits,
or offse
ts
4Federal income tax withheld (backup
withholding or voluntary withholding
on unemployment compensation or
Commodity Credit Corporation Loans, or
certain crop disaster payments)
5Alternative Trade Adjustment Assistance
(ATAA) Payments
6Taxable grants
7Agriculture payments
For Reporting Payments on Form 1099–H:Amount CodesForm 1099–H— Health
Coverage Tax Credit (HCTC) Advance
PaymentsA
mountCodeAmountType
1Gross amount of health insurance advance
payments
2Amount of advance payment for January
3Amount of advance payment for February
4Amou
nt of advance payment for March
5Amount of advance payment for April
6Amount of advance payment for May
7Amo
unt of advance payment for June
8Amount of advance payment for July
9Amount of advance payment for August
AAm
ount of advance payment for September
BAmount of advance payment for October
CAmount of advance payment for November
DA
mount of advance payment for December
For Reporting Payments on Form 1099–INT:Amount CodesForm 1099–INT—
Interest Income
A
mountCodeAmountType
1I
nterest income not included in Amount
Code 3
2Early withdrawal penalty
2007–30 I.R.B.174July 23, 2007

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
AmountCodeAmountType
3Interest on U.S. Savings Bonds and
Treasury obligations
4Federal income tax withheld (backup
withholding)
5Investment expenses
6Foreign tax paid
8Tax-exempt interest
9Specified Private Activity Bond Interest
For Reporting Payments on Form 1099–LTC:Amount CodesForm 1099–LTC—
Long-Term Care and Accelerated Death
BenefitsA
mountCodeAmountType
1Gross long-term care benefits paid
2Accelerated death benefits paid
For Report
ing Payments on Form 1099–MISC:
Amount Cod
esForm 1099–MISC—
Miscella
neous Income
(See Note 1
.)
A
mountCod
e
AmountTyp
e
1Rents
2Royalties(See Note 2.)
3Otherin
come
4Federal income tax withheld (backup
withholding or withholding on Indian
gaming profits)
5Fishin
g boat proceeds
6Medical and health care payments
7Nonemployee compensation
8Substitute payments in lieu of dividends or
interest
ACropi
nsurance proceeds
BExcess golden parachute payments
CGross proceeds paid to an attorney in
connection with legal services
DSection 409A Deferrals
ESec
tion 409A Income
Note 1: If reporting a direct sales indicatoronly, use Type of Return “A” in Field Position 27, and Amount Code 1 in Field
Position 28 of the Payer “A” Record. All payment amount fields in the Payee “B” Record will contain zeros.
Note 2: Do not report timber royalties under a “pay-as-cut” contract; these must be reported on Form 1099–S.
Amount CodesForm 1099–OID—
Original Issue Discount
For Reporting Payments on Form 1099–OID:
A
mountCodeAmountType
1Original issue discount for2007
2O
ther periodic interest
3Early withdrawal penalty
4Federal income tax withheld (backup
withholding)
6Original issue discount on U.S. Treasury
Obligations
7Investment expenses
July 23, 20071752007–30 I.R.B.

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
For Reporting Payments on Form 1099–PATR:Amount CodesForm 1099–PATR—
Taxable Distributions Received From
CooperativesA
mountCodeAmountType
1Patronage dividends
2Nonpatronag
e distributions
3Per-unit retain allocations
4Federal income tax withheld (backup
withholding)
5Redemption of nonqualified notices and
retain allocations
6Deduction for qualified production
activities income
Pass-Through Credits
7Investment credit
8Work opportunity credit
9Patron’s alternative minimum tax (AMT)
adjustment
AFor filer’s use for pass-through credits and
deductions
For Repo
rting Payments on a Form 1099–Q:
Amount C
odesForm 1099–Q—
Payment
s From Qualified Education
Program
s (Under Sections 529 and 530)
A
mountC
ode
AmountT
ype
1Gross distribution
2Earnings
3Basis
For Reporting Payments on Form 1099–R:
A
mountCodeAmountType
1Gross distribution
2Taxable amount(See Note 1.)
3Capital gain (included in Amount Code 2)
4Fed
eral income tax withheld
5Employee contributions or insurance
premiums
6Net unrealized appreciation in employer’s
securities
8Other
9Total employee contributions
Amount CodesForm 1099–R—
Distributions From Pensions, Annuities,
Retirement or Profit–Sharing Plans, IRAs,
Insurance Contracts, etc.
ATraditional IRA/SEP/SIMPLE distribution
or Roth conversion(See Note 2.)
Note 1: If the taxable amount cannot be determined, enter a “1” (one) in position 547 of the “B” Record. Payment
Amount 2 must contain zeros.
Note 2: For Form 1099–R, report the Roth conversion or total amount distributed from an IRA, SEP, or SIMPLE in
Payment Amount Field A (IRA/SEP/SIMPLE distribution orRoth conversion) of the Payee “B” Record, and generally,
the same amount in Payment Amount Field 1 (Gross Distribution). The IRA/SEP/SIMPLE indicator should be set to
“1” (one) in Field Position 548 of the Payee “B” Record.
2007–30 I.R.B.176July 23, 2007

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
For Reporting Payments on Form 1099–S:Amount CodesForm 1099–S— Proceeds
From Real Estate Transactions
A
mountCodeAmountType
2Gross proceeds(See Note.)
5Buyer’s part of real estate tax
Note: Include payments of timber royalties made under a “pay-as-cut” contract, reportable under IRC section 6050N. If
timber royalties are being reported, enter “TIMBER” in the description field of the “B” Record.
For Reportin
g Distributions on Form 1099–SA:
Amount Codes
Form 1099–SA —
Distributio
ns From an HSA, Archer MSA
or Medicare
Advantage MSA
A
mountCodeAmountType
1Gross distribution
2Earnings on excess contributions
4Fair marke
t value of the account on date
of death
For Reporting Information on Form 5498:Amount CodesForm 5498—IRA
Contribution Information
A
mountCodeAmountType
1IRAcontr
ibutions (other than amounts in
Amount Co
des2,3,4,8,9,andA)(See
Notes 1 an
d2.)
2Rollover contributions
3Roth con
version amount
4Recharacterized contributions
5Fair market value of account
6Life insurance cost included in Amount
Code 1
8SEPcon
tributions
9SIMPLE contributions
ARoth IRA contributions
Note 1: If reporting IRA contributions fora participant in a military operation, see2007 Instructions for Forms 1099–R
and 5498.
Note 2: Also include employee contributions to an IRA under a SEP plan but not salary reduction contributions. D
O
NOTincludeEMPLOYERcontributions; these are included in Amount Code 8.
For Reporting Information on Form 5498–ESA:Amount CodesForm 5498–ESA—
Coverdell ESA Contribution Information
A
mountCodeAmountType
1Coverdell ESA contributions
2Rollover contributions
Fo
r Reporting Information on Form 5498–SA:
Am
ount CodesForm 5498–SA—HSA,
Ar
cher MSA, or Medicare Advantage
MS
A Information
A
m
ountCode
Am
ountType
1Employee or self-employed person’s
Archer MSA contributions made in 2007
and 2008 for 2007
2Total contributions made in 2007 (See
current 2007 Instructions.)
3T
otal HSA/MSA contributions made in
2
008 for 2007
4Rollover contributions(See Note.)
July 23, 20071772007–30 I.R.B.

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
AmountCodeAmountType
5Fair market value of HSA, Archer MSA
or Medicare Advantage MSA account on
Dec. 31, 2007
Note:ThisistheamountofanyrollovermadetothisMSAin2007after a distribution from another MSA. For detailed
information on reporting, see the2007 Instructions for Forms 1099–SA and 5498–SA.
Amount CodesForm W–2G—Certain
Gambling Winnings
For Reporting Payments on Form W–2G:
A
mountCodeAmountType
1Grosswinnings
2Federal income tax withheld
7Winnings from identical wagers
42–51Blank10 Enter blanks.
52Foreign En
tity
Indicator
1Enter a “1”
(one) if the payer is a foreign entity and income is paid by the foreign
entitytoa
U.S. resident. Otherwise, enter a blank.
53–92First Payer
Name Line
40Required.Enter the name of the payer whose TIN appears in positions 12–20 of the
“A” Record. Any extraneous information must be deleted. Left-justify information,
and fill unused positions with blanks. (Filers should not enter a transfer agent’s
name in this field. Any transfer agent’s name should appear in the Second Payer
Name Line Field.)
93–132Second Payer
Name Line
40 If the Transfer (or Paying) Agent Indicator (position 133) contains a “1” (one),
this field must contain the name of the transfer (or paying) agent. If the indicator
contains a “0” (zero), this field may contain either a continuation of the First Payer
Name Line or blanks. Left-justify information and fill unused positions with blanks.
133Transf
er
Agent In
dicator
1Requir
ed.Identifies the entity in the Second Payer Name Line Field.
CodeMeaning
1The entity in the Second Payer Name Line
Field is the transfer (or paying) agent.
0 (zero)The entity shown isnotthe transfer (or
paying) agent (i.e., the Second Payer Name
Line Field contains either a continuation of
the First Payer Name Line Field or blanks).
134–173Payer
Shipping
Address
40Required.If the Transfer Agent Indicator in position 133 is a “1” (one), enter the
shipping address of the transfer (or paying) agent. Otherwise, enter theactual
shipping address of the payer. The street address should include number, street,
apartment or suite number, or PO Box if mail is not delivered to a street address.
Left-justify information, and fill unused positions with blanks.
For U.S. addresses, the payer city, state, and ZIP Code must be reported as a 40, 2, and 9-position field, respectively.Filers must
adhere to the correct format for the payer city, state, and ZIP Code.
For foreign addresses,filers may use the payer city, state, and ZIP Code as acontinuous 51-position field. Enter information
in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the
Foreign Entity Indicator in position 52 must contain a “1” (one).
174–213Payer City40Required.If the Transfer Agent Indicator in position 133 is a “1” (one), enter the
city, town, or post office of the transfer agent. Otherwise, enter the city, town, or post
office of the payer. Left-justify information, and fill unused positions with blanks.
Do not enter state and ZIP Code information in this field.
2007–30 I.R.B.178July 23, 2007

Record Name: Payer “A” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
214–215Payer State2Required. Enter the valid U.S. Postal Service state abbreviations. Refer to the chart
of valid state abbreviations in Part A, Sec. 14.
216–224Payer ZIP Code 9Required.Enter the valid nine-digit ZIP Code assigned by the U.S. Postal Service.
If only the first five-digits are known, left-justify information and fill the unused
positions with blanks. For foreign countries, alpha characters are acceptable as long
as the filer has entered a “1” (one) in the Foreign Entity Indicator, located in Field
Position 52 of the “A” Record.
225–239Payer’s Phone
Number &
Extension
15Enter the payer’s phone number and extension. Omit hyphens. Left-justify
information and fill unused positions with blanks.
240–499Blank260Enter blanks.
500–507Record
Sequence
Number
8Required.Enter the number of the record as it appears within your file. The record
sequence number for the “T” record will always be “1” (one), since it is the first
record on your file and you can have onlyone “T” record in a file. Each record,
thereafter, must be incremented by one inascending numerical sequence, i.e., 2, 3,
4, etc. Right-justify numbers with leading zeros in the field. For example, the “T”
record sequence number would appear as “00000001” in the field, the first “A” record
would be “00000002”, the first “B” record, “00000003”, the second “B” record,
“00000004” and so on until you reach the final record of the file, the “F” record.
508–748Blank241Enter blanks.
749–750Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Sec. 5. Payer “A” Record — Record Layout
Record
Type
Payment
Year
BlankPayer
TIN
Payer Name
Control
Last Filing
Indicator
12–56–1112–2021–2425
Combined
Federal/State
Filer
Type
of
Return
Amount
Codes
BlankForeign
Entity
Indicator
First
Payer Name
Line
262728–4142–515253–92
Second Payer
Name
Line
Transfer
Agent
Indicator
Payer
Shipping
Address
Payer
City
Payer
State
Payer
ZIP
Code
93–132133134–173174–213214–215216–224
Payer’s Phone
Number and
Extension
BlankRecord
Sequence
Number
BlankBlank or
CR/LF
225–239240–499500–507508–748749–750
July 23, 20071792007–30 I.R.B.

Sec. 6. Payee “B” Record — General Field Descriptions and Record Layouts
.01The “B” Record contains the payment information from the information returns. The record layout for field positions 1 through
543 is the same for all types of returns. Field positions 544 through 750 vary for each type of return toaccommodate special fields for
individual forms. In the “B” Record, the filermustallow for allfourteenPaymentAmountFields.For those fields not used, enter
“0s” (zeros).
.02The following specifications include a field in the payee records called “NameControl” in which the first four characters of
the payee’s surname are to be entered by the filer:
(a)If filers are unable to determine the first four characters of the surname, the Name Control Field may be left blank. Com-
pliance with the following will facilitate IRS computer programs in identifying the correct name control:
(1)The surname of the payee whose TIN is shown in the “B” Recordshould always appear first. If, however, the records
have been developed using the first name first, the filer must leave a blank space between the first and last names.
(2)In the case of multiple payees, the surname of the payee whose TIN (SSN, EIN, ITIN, or ATIN) is shown in the “B”
Record must be present in the First Payee Name Line. Surnames of any other payees may be entered in the Second
Payee Name Line.
.03For all fields marked“Required”, the transmitter must provide the information described under “Description and Remarks”.
For those fields not marked“Required”, the transmitter must allow for the field, but may be instructed to enter blanks or zeros in the
indicated field position(s)and for the indicated length.
.04All records must be a fixed length of 750 positions.
.05A field is also provided in these specifications for Special DataEntries. This field may be used torecord information required
by state or local governments, or for the personal use of the filer. IRS does not use the data provided in the Special Data Entries Field;
therefore, the IRS program does not check the content or format ofthe data entered in this field. It is the filer’s option to use the
Special Data Entry Field.
.06Following the Special Data Entries Field in the “B” Record, payment fields have been allocatedfor State Income Tax Withheld
and Local Income Tax Withheld. These fields are for the convenience of the filers. The information will not be used by IRS/ECC-
MTB.
.07Those payers participating in the Combined Federal/State Filing Program must adhere to all of the specifications in Part A,
Sec. 12, to participate in this program.
.08All alpha characters in the “B” Record must be uppercase.
.09 Do notuse decimal points (.) to indicate dollars and cents. Payment Amount Fields must be all numeric characters.
Record Name: Payee “B” Record
Field
Position
Field TitleLength Description and Remarks
1Record Type1Required.Enter “B”.
2–5Payment Year4Required.Enter “2007”. If reporting prior year data, report the year
which applies (2005, 2006, etc.).
6Corrected Return
Indicator
(See Note.)
1Required for corrections only.Indicates a corrected return.
CodeDefinition
GIf this is a one-transactioncorrectionorthefirstof
a two-transaction correction
CIf this is the second transaction of a two-transaction
correction
BlankIf this is not a return being submitted to correct
information already processed by IRS
Note: C, G, and non-coded records must be reported usingseparate Payer “A” Records. Refer to Part A, Sec. 10,
for specific instructions on how to file corrected returns.
2007–30 I.R.B.180July 23, 2007

Record Name: Payee “B” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
7–10Name Control4If determinable, enter the first four characters of the surname of the
person whose TIN is being reported in positions 12-20 of the “B”
Record; otherwise,enter blanks. This usually is the payee. If the
name that corresponds to the TIN is not included in the first or sec-
ond payee name line and the correctname control is not provided,
a backup withholding notice may be generated for the record. Sur-
names of less than four characters should be left-justified, filling
the unused positions with blanks. Special characters and imbedded
blanks should be removed. In the case of a business, other than a sole
proprietorship, use the first four significant characters of the busi-
ness name. Disregard the word “the” when it is the first word of the
name, unless there are only two words in the name. A dash (-) and an
ampersand (&) are the only acceptable special characters. Surname
prefixes are considered, e.g., for Van Elm, the name control would be
VANE. For a sole proprietorship, use the name of the owner to create
the name control and report the owner’s name in positions 248–287,
First Payee Name Line.
Note: Imbedded blanks, extraneous words, titles, and special characters (i.e., Mr., Mrs., Dr., period [.], apostrophe
[’]) should be removed from the Payee Name Lines. A dash(-) and an ampersand (&) are the only acceptable special
characters.
The following examples may be helpful to filers in developing the Name Control:
NameNameControl
Individuals:
JaneB
rownBROW
John A.L
eeLEE*
James P.E
n,Sr.EN*
JohnO
’
Neil
ONEI
MaryV
anBurenVANB
JuanD
eJesusDEJE
Gloria A.E
l-RoyEL-R
Mr. JohnS
mithSMIT
JoeM
cCarthyMCCA
Pedr
oT
orres-Lopes**
TORR
MariaL
opez Moreno**LOPE
Binh ToL
aLA*
Nhat ThiP
hamPHAM
Corporations:
TheF
irstNationalBankFIRS
T
h
eHideaway
TH
EH
A
&BCafeA&BC
1
1THStreet Inc.11TH
Sole Proprietor:
MarkH
emlock
DBA The Sunshine Club
HEML
MarkD
’AllesandroDALL
July 23, 20071812007–30 I.R.B.

Record Name: Payee “B” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
Partnership:
RobertAspen
and Bess Willow
ASPE
HaroldF
ir,BruceElm,
and Joyce Spruce et al Ptr
FIR*
Estate:
FrankW
hiteEstateWHIT
Estate of SheilaB
lueBLUE
Trusts and Fiduciaries:
D
aisy Corpo
ration Employee
Benefit Tru
st
DAIS
Trust FBO The
C
herryblossom
Society
CHER
Exempt Organizations:
L
aborer’s Union, AFL-CIOLABO
S
t.Berna
rd’s Methodist
Church Bl
dg. Fund
STBE
*Name Controls of less than four significant characters must be left-justified and blank-filled.
**For Hi
spanic names, when two last names are shown for an individual, derive the name control from the first last name.
11Type of TIN1This field is used to identify the Taxpayer Identification Number
(TIN) in positions 12–20 as eitheran Employer Identification Num-
ber (EIN), a Social Security Number (SSN), an Individual Taxpayer
Identification Number (ITIN) or an Adoption Taxpayer Identification
Number (ATIN). Enter the appropriate code from the following table:
CodeTypeofTINTypeofAccount
1EINA business, organization, some
sole proprietors, or other entity
2SSNAnind
ividual, including some sole
propr
ietors
2ITINAn individual required to have a
taxpayer identification number,
but who is not eligible to obtain an
SSN
2ATINAn adopted individual prior to the
assignment of a social security
number
Bla
nk
N/AIf t
he type of TIN is not deter-
min
able, enter a blank
12–20Payee’s
Taxpayer
Identification
Number (TIN)
9Required.Enter the nine-digit Taxpayer Identification Number of
the payee (SSN, ITIN, ATIN, or EIN). If an identification number
has been applied for but not received, enter blanks.Do not enter
hyphens or alpha characters.All zeros, ones, twos, etc., will have
the effect of an incorrect TIN. If the TIN is not available, enter blanks.
2007–30 I.R.B.182July 23, 2007

Record Name: Payee “B” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
Note: If you are required to report payments made through Foreign Intermediaries and Foreign Flow-Through Entities on
Form 1099, see the2007 General Instructions for Forms 1099, 1098, 5498 and W–2Gfor reporting requirements.
21–40Payer’s
Account
Number For
Payee
20Required if submitting more than one information return of the
same type for the same payee.Enter any number assigned by the
payer to the payee that can be used by the IRS to distinguish between
information returns. This number must be unique for each informa-
tion return of the same type for the same payee. If a payee has more
than one reporting of the same document type, it is vital that each re-
porting have a unique account number. For example, if a payer has
3 separate pension distributionsfor the same payee and 3 separate
Forms 1099–R are filed, 3 separate unique account numbers are re-
quired. A payee’s account number may be given a unique sequencing
number, such as 01, 02 or A, B, etc., to differentiate each reported in-
formation return. Do not use the payee’s TIN since this will not make
each record unique. This information is critical when corrections are
filed. This number will be provided with the backup withholding no-
tification and may be helpful in identifying the branch or subsidiary
reporting the transaction. The account number can be any combi-
nation of alpha, numeric or special characters. If fewer than twenty
characters are used, filers may either left or right-justify, filling the
remaining positions with blanks.
41–44Payer’s Office
Code
4Enter office code of payer; otherwise, enter blanks. For payers with
multiple locations, this field may be used to identify the location of
the office submitting the information return. This code will also ap-
pear on backup withholding notices.
45–54Blank10Enter blanks.
Payment
Amount Fields
(Must be
numeric)
Required. Filers should allow for all payment amounts. For
those not used, enter zeros.Each payment field must contain 12
numeric characters. Each payment amount must contain U.S. dollars
and cents. The right-most two positions represent cents in the pay-
ment amount fields.Do not enter dollar signs, commas, decimal
points, or negative payments, except those items that reflect a loss
on Form 1099–B or 1099–Q.Positive and negative amounts are in-
dicated by placing a “+” (plus) or “-” (minus) sign in the left-most
position of the payment amount field. A negative over punch in the
unit’s position may be used, instead of a minus sign, to indicate a
negative amount. If a plus sign, minus sign, or negative over punch
is not used, the number is assumed to be positive. Negative over
punch cannot be used in PC created files. Payment amounts must be
right-justified and unused positions must be zero filled.
55–66Payment
Amount 1*
12The amount reported in this field represents payments for Amount
Code 1 in the “A” Record.
67–78Payment
Amount 2*
12The amount reported in this field represents payments for Amount
Code 2 in the “A” Record.
79–90Payment
Amount 3*
12The amount reported in this field represents payments for Amount
Code 3 in the “A” Record.
91–102Payment
Amount 4*
12The amount reported in this field represents payments for Amount
Code 4 in the “A” Record.
103–114 Payment
Amount 5*
12The amount reported in this field represents payments for Amount
Code 5 in the “A” Record.
July 23, 20071832007–30 I.R.B.

Record Name: Payee “B” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
115–126 Payment
Amount 6*
12The amount reported in this field represents payments for Amount
Code 6 in the “A” Record.
127–138 Payment
Amount 7*
12The amount reported in this field represents payments for Amount
Code 7 in the “A” Record.
139–150 Payment
Amount 8*
12The amount reported in this field represents payments for Amount
Code 8 in the “A” Record.
151–162 Payment
Amount 9*
12The amount reported in this field represents payments for Amount
Code 9 in the “A” Record.
163–174 Payment
Amount A*
12The amount reported in this field represents payments for Amount
Code A in the “A” Record.
175–186 Payment
Amount B*
12The amount reported in this field represents payments for Amount
Code B in the “A” Record.
187–198 Payment
Amount C*
12The amount reported in this field represents payments for Amount
Code C in the “A” Record.
199–210 Payment
Amount D*
12The amount reported in this field represents payments for Amount
Code D in the “A” Record.
211–222 Payment
Amount E*
12The amount reported in this field represents payments for Amount
Code E in the “A” Record.
*If there are discrepancies between the payment amount fields and the boxes on the paper forms, the instructions in this
Revenue Procedure must be followed for electronic/magnetic filing.
223–246 Reserved24Enter blanks.
247Foreign
Country
Indicator
1If the address of the payee is in a foreign country, enter a “1”
(one) in this field; otherwise, enter blank. When filers use this in-
dicator, they may use a free format for the payee city, state, and ZIP
Code. Enter information in the following order: city, province or
state, postal code, and the name of the country. Address information
must not appear in the First or Second Payee Name Line.
248–287 First Payee
Name Line
40Required.Enter the name of the payee (preferably surname first)
whose Taxpayer Identification Number (TIN) was provided in posi-
tions 12–20 of the Payee “B” Record. Left-justify and fill unused
positions with blanks. If more space is required for the name, use the
Second Payee Name Line Field. If reporting information for a sole
proprietor, the individual’s name must always be present on the First
Payee Name Line. The use of the business name is optional in the
Second Payee Name Line Field. End the First Payee Name Line with
a full word. Use appropriate spacing. Extraneous words, titles, and
special characters (i.e., Mr., Mrs., Dr., period, apostrophe) should be
removed from the Payee Name Lines. A dash (-) and an ampersand
(&) are the only acceptable special characters for First and Second
PayeeNameLines.
Note: If you are required to report payments made through Foreign Intermediaries and Foreign Flow-Through Entities on
Form 1099, see the2007 General Instruction for Forms 1099, 1098, 5498, and W–2Gfor reporting requirements.
2007–30 I.R.B.184July 23, 2007

Record Name: Payee “B” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
288–327 Second Payee
Name Line
40If there are multiple payees (e.g.,partners, joint owners, or spouses),
use this field for those names not associated with the TIN provided in
positions 12–20 of the “B” Record, or if not enough space was pro-
vided in the First Payee Name Line, continue the name in this field.
Left-justify information and fill unused positions with blanks.Do
not enter address information.It is important that filers provide as
much payee information to IRS/ECC-MTB as possible to identify the
payee associated with the TIN. Left-justify and fill unused positions
with blanks.SeeNoteaboveinFirstPayeeNameLine.
328–367 Blank40Enter blanks.
368–407 Payee Mailing
Address
40Required.Enter mailing address of payee. Street address should
include number, street, apartment or suite number, or PO Box if mail
is not delivered to street address. This fieldmust notcontain any
data other than the payee’s mailing address.
408–447 Blank40Enter blanks.
448–487 Payee City40Required.Enter the city, town or post office. Left-justify informa-
tion and fill the unused positions with blanks. Enter APO or FPO if
applicable. Do not enter state and ZIP Code information in this field.
488–489 Payee State2Required. Enter the valid U.S. Postal Service state abbreviations for
states or the appropriate postal identifier (AA, AE, or AP) described
in Part A, Sec. 14.
490–498 Payee ZIP
Code
9Required.Enter the valid ZIP Code (nine or five-digit) assigned
by the U.S. Postal Service. If only the first five-digits are known,
left-justify information and fill the unused positions with blanks. For
foreign countries, alpha characters are acceptable as long as the filer
has entered a “1” (one) in the Foreign Country Indicator, located in
position 247 of the “B” Record.
499Blank1Enter blank.
500–507 Record
Sequence
Number
8Required.Enter the number of the record as it appears within your
file. The record sequence number for the “T” record will always be
“1” (one), since it is the first record on your file and you can have
only one “T” record in a file. Each record, thereafter, must be in-
cremented by one in ascending numerical sequence, i.e., 2, 3, 4, etc.
Right-justify numbers with leading zeros in the field. For example,
the “T” record sequence numberwould appear as “00000001” in the
field, the first “A” record would be “00000002”, the first “B” record,
“00000003”, the second “B” record, “00000004” and so on until you
reach the final record of the file, the “F” record.
508–543 Blank36Enter blanks.
July 23, 20071852007–30 I.R.B.

Standard Payee “B” Record Format For All Types of Returns, Positions 1–543
Record
Type
Payment
Year
Corrected
Return
Indicator
Name
Control
Type of
TIN
Payee’s
TIN
Payer’s
Account
Number For
Payee
12–567–101112–2021–40
Payer’s
Office Code
BlankPayment
Amount
1
Payment
Amount
2
Payment
Amount
3
Payment
Amount
4
Payment
Amount
5
41–4445–5455–6667–7879–9091–102103–114
Payment Amount
6
Payment Amount
7
Payment Amount
8
Payment Amount
9
Payment Amount
A
Payment Amount
B
115–126127–138139–150151–162163–174175–186
Payment
Amount C
Payment
Amount D
Payment
Amount E
ReservedForeign
Country
Indicator
First
Payee
Name
Line
Second
Payee
Name
Line
Blank
187–198199–210211–222223–246247248–287288–327328–367
Payee
Mailing
Address
BlankPayee
City
Payee
State
Payee
ZIP Code
BlankRecord
Sequence
Number
Blank
368–407408–447448–487488–489490–498499500–507508–543
The following sections define the field positions for the different types of returns in the Payee “B” Record (positions
544–750):
(1) Form 1098
(2) Form 1098–C
(3) Form 1098–E
(4) Form 1098–T
(5) Form 1099–A
(6) Form 1099–B
(7) Form 1099–C
(8) Form 1099–CAP
(9) Form 1099–DIV*
(10) Form 1099–G*
(11) Form 1099–H
(12) Form 1099–INT*
(13) Form 1099–LTC
(14) Form 1099–MISC*
(15) Form 1099–OID*
(16) Form 1099–PATR*
(17) Form 1099–Q
(18) Form 1099–R*
(19) Form 1099–S
2007–30 I.R.B.186July 23, 2007

(20) Form 1099–SA
(21) Form 5498*
(22) Form 5498–ESA
(23) Form 5498–SA
(24) Form W–2G
* These forms may be filed through the Combined Federal/State Filing Program. IRS/ECC-MTB will forward these records to
participating states for filers who have been approved for theprogram. See Part A, Sec. 12, for information about the program,
including specific codesfor the record layouts.
(1) Payee “B” Record — Record LayoutPositions 544–750 for Form 1098
Field
Position
Field TitleLength Description and Remarks
544–662 Blank119Enter blanks.
663–722 Special Data Entries60This portion of the “B” Record may be used to record information for
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record LayoutPositions 544–750 for Form 1098
BlankSpecial
Data
Entries
BlankBlank
or CR/LF
544–662663–722723–748749–750
(2) Payee “B” Record — Record Layout Positions 544–750 for Form 1098–C
Field
Position
Field TitleLength Description and Remarks
544–545 Blank2Enter blanks.
546Transaction Indicator1Enter “1” (one) ifthe amount reported in Payment Amount Field
4 is an arm’s length transaction to an unrelated party. Otherwise,
enter a blank.
547Transfer After Improvements
Indicator
1Enter “1” (one) if the vehicle will not be transferred for money, other
property, or services before completion of material improvements or
significant intervening use. Otherwise, enter a blank.
548Transfer Below Fair Market Value
Indicator
1Enter “1” (one) if the vehicle is transferred to a needy individual for
significantly below fair market value. Otherwise, enter a blank.
549–587 Make, Model, Year39Enter the make, model and year of vehicle. Left-justify and fill un-
used positions with blanks.
588–612 Vehicle or Other Identification
Number
25Enter the vehicle or other identification number of the donated vehi-
cle. Left-justify and fill unused positions with blanks.
613–651 Vehicle Description39Enter a descriptionof material improvements or significant interven-
ing use and duration of use. Left-justify and fill unused positions with
blanks.
July 23, 20071872007–30 I.R.B.

(2) Payee “B” Record — Record Layout Positions 544–750 for Form 1098–C (Continued)
Field
Position
Field TitleLength Description and Remarks
652–659 Date of Contribution8Enter the date the contribution was made to an organization, in the
format YYYYMMDD (e.g., January 5, 2007, would be 20070105).
Do not enter hyphens or slashes.
660Donee Indicator1Enter the appropriate indicator from the following table to report if
the donee of the vehicle providesgoods or services in exchange for
the vehicle.
IndicatorUsage
1Donee provided goods or services
2Donee did not provide goods or
services
661Intangible Religious Benefits
Indicator
1Enter a “1” (one) if only intangible religious benefits were provided
in exchange for the vehicle;otherwise, leave blank.
662
Deduction $500 or Less Indicator
1Enter a “1” (one) if under law donor cannot claim a deduction of more
than $500 for the vehicle; otherwise, leave blank.
663–722 Special Data Entries60This portion of the “B” Record may be used to record information for
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for the
filing requirements. If this field is not utilized, enter blanks.
723–730 Date of Sale8Enter the date of sale, in the format YYYYMMDD (e.g., January 5,
2007, would be 20070105).Do not enter hyphens or slashes.
731–748 Goods and Services18Enter adescription of any goods and services received for the vehicle;
otherwise, leave blank. Left-justify and fill unused positions with
blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1098–C
BlankTransaction
Indicator
Transfer After
Improvements
Indicator
Transfer Below
Fair Market
Value Indicator
Make, Model,
Year
Vehicle or
Other
Identification
Number
Vehicle
Description
544–545546547548549–587588–612613–651
Date of
Contribution
Donee
Indicator
Intangible
Religious
Benefits
Indicator
Deduction
$500 or Less
Indicator
Special Data
Entries
Date of Sale Goods and
Services
Blank
652–659660661662663–722723–730731–748749–750
2007–30 I.R.B.188July 23, 2007

(3) Payee “B” Record — Record Layout Positions 544–750 for Form 1098–E
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Origination
Fees/Capitalized
Interest Indicator
1Enter “1” (one) if the amount reported in Payment Amount Field 1
includes loan origination fees and/or capitalized interest. Otherwise,
enter a blank.
548–662 Blank115Enter blanks.
663–722 Special
Data Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for the
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1098–E
BlankOrigination
Fees/Capitalized
Interest Indicator
BlankSpecial Data
Entries
BlankBlank
or CR/LF
544–546547548–662663–722723–748749–750
(4) Payee “B” Record — Record Layout Positions 544–750 for Form 1098–T
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Half-time Student
Indicator
1Enter “1” (one) if the student was at least a half-time student during
any academic period that began in 2007. Otherwise, enter a blank.
548Graduate Student
Indicator
1Enter “1” (one) if the student is enrolled exclusively in a graduate
level program. Otherwise, enter a blank.
549Academic Period
Indicator
1Enter “1” (one) if the amount in Payment Amount Field 1 or
Payment Amount Field 2 includes amounts for an academic period
beginning January through March2008. Otherwise, enter a blank.
550Method of Reporting 2006
Amounts Indicator
1
Requir
ed.Enter “1” (one) if the method of reporting has changed
from th
e previous year. Otherwise, enter a blank.
551–662 Blank112Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for the
filing requirements. If this field is not utilized, enter blanks.
723–7
48
Blank26Enter
blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
July 23, 20071892007–30 I.R.B.

Payee “B” Record — Record Layout Positions 544–750 for Form 1098–T
BlankHalf-time Student
Indicator
Graduate Student
Indicator
Academic Period
Indicator
Method of Reporting
2006 Amounts
Indicator
544–546547548549550
BlankSpecial Data EntriesBlankBlank or CR/LF
551–662663–722723–748749–750
(5) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–A
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Personal Liability
Indicator
1Enter the appropriate indicator from the table below:
IndicatorUsage
1Borrower was personally liable
for repayment of the debt.
BlankBorrower was not personally
liable for repayment of the debt.
548–555 Date of Lender’s
Acquisition or
Knowledge of
Abandonment
8Enter the acquisition date of thesecured property or the date the
lender first knew or had reason to know the property was abandoned,
in the format YYYYMMDD (e.g., January 5, 2007, would be
20070105).Do not enter hyphens or slashes.
556–594 Description of
Property
39Enter a brief description of the property. For real property, enter
the address, or, if the address does not sufficiently identify the
property, enter the section, lot and block. For personal property,
enter the type, make and model (e.g., Car-1999 Buick Regal or
Office Equipment). Enter “CCC” for crops forfeited on Commodity
Credit Corporation loans. If fewer than 39 positions are required,
left-justify information and fill unused positions with blanks.
595–662 Blank68Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for the
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks, or carriage return/line feed (CR/LF) characters.
2007–30 I.R.B.190July 23, 2007

Payee “B” Record — Record Layout Positions 544–750 for Form 1099–A
BlankPersonal Liability
Indicator
Date of Lender’s
Acquisition or
Knowledge of
Abandonment
Description
of
Property
Blank
544–546547548–555556–594595–662
Special
Data
Entries
BlankBlank
or CR/LF
663–722723–748749–750
(6) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–B
Field
Position
Field TitleLength Description and Remarks
544Second TIN
Notice
(Optional)
1Enter “2” (two) to indicate notification by IRS twice within three
calendar years that the payee provided an incorrect name and/or
TIN combination; otherwise, enter a blank.
545–546 Blank2Enter blanks.
547Gross Proceeds
Indicator
1Enter the appropriate indicator from the following table, to identify
the amount reported in Amount Code 2; otherwise, enter a blank.
IndicatorUsage
1Gross proceeds
2Gross proceeds less commissions and options
premiums
548–555 Date of Sale or
Exchange
8For broker transactions, enter the trade date of the transaction.
For barter exchanges, enter the date when cash, property, a
credit, or scrip is actually or constructively received in the format
YYYYMMDD (e.g., January 5, 2007, would be 20070105). Enter
blanks if this is an aggregate transaction.Do not enter hyphens
or slashes.
556–568 CUSIP Number13For broker transactions only, enter the CUSIP (Committee on
Uniform Security Identification Procedures)numberoftheitem
reported for Amount Code 2 (stocks, bonds, etc.). Enter blanks if
this is an aggregate transaction.Enter“0s”(zeros)ifthenumberis
not available. Right-justify information and fill unused positions
with blanks.
569–607 Description39If fewer than 39 characters are required, left-justify information and
fill unused positions with blanks. For broker transactions, enter a
brief description of the disposition item (e.g., 100 shares of XYZ
Corp). For regulated futures andforward contracts, enter “RFC” or
other appropriate description. For bartering transactions, show the
services or property provided.
608–615 Number of
Shares
Exchanged
8Enter the number of shares of the corporation’s stock which
were exchanged in the transaction. Report whole number only.
Right-justify information and fill unused positions with zeros.
July 23, 20071912007–30 I.R.B.

(6) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–B (Continued)
Field
Position
Field TitleLength Description and Remarks
616–625 Classes of
Stock
Exchanged
10Enter the class of stock that was exchanged. Left-justify the
information and fill unused positions with blanks.
626Recipient
Indicator
1Enter a “1” (one) if recipient is unable to claim a loss on their tax
return. Otherwise, enter a blank.
627–662 Blank36Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record may be used to record information
for state or local government reporting or for the filer’s own
purposes. Payers should contact the state or local revenue
departments for filing requirements. If this field is not utilized, enter
blanks.(See Note.)
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries field.
747–748 Blank2Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Note: Report the Corporation’s Name, Address, City, State, and ZIP in the Special Data Entry field.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–B
Second
TIN Notice
(Optional)
BlankGross
Proceeds
Indicator
Date
of Sale
or Exchange
CUSIP
Number
DescriptionNumber of
Shares
Exchanged
544545–546547548–555556–568569–607608–615
Classes of
Stock
Exchanged
Recipient
Indicator
BlankSpecial
Data Entries
State
Income
Tax
Withheld
Local
Income
Tax
Withheld
BlankBlank
or CR/LF
616–625626627–662663–722723–734735–746747–748749–750
2007–30 I.R.B.192July 23, 2007

(7) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–C
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Bankruptcy
Indicator
1Enter “1” (one) to indicate the debt was discharged in bankruptcy, if
known. Otherwise, enter a blank.
548–555 Date Canceled8Enter the date the debt was canceled in the format of YYYYMMDD
(e.g., January 5, 2007, would be 20070105).Do not enter hyphens
or slashes.
556–594 Debt
Description
39Enter a description of the origin of the debt, such as student loan,
mortgage, or credit card expenditure. If a combined Form 1099–C
and 1099–A is being filed, also enter a description of the property.
595–662 Blank68Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–C
BlankBankruptcy
Indicator
Date
Canceled
Debt
Description
BlankSpecial
Data
Entries
544–546547548–555556–594595–662663–722
BlankBlank
or CR/LF
723–748749–750
(8) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–CAP
Field
Position
Field TitleLength Description and Remarks
544–547 Blank4Enter blanks.
548–555 Date of Sale or
Exchange
8Enter the date the stock was exchanged for cash, stock in the
successor corporation, or otherproperty received in the format
YYYYMMDD (e.g., January 5, 2007, would be 20070105).Do
not enter hyphens or slashes.
556–607 Blank52Enter blanks.
608–615 Number of
Shares
Exchanged
8Enter the number of shares of the corporation’s stock which
were exchanged in the transaction. Report whole number only.
Right-justify information and fill unused positions with zeros.
616–625 Classes of Stock
Exchanged
10Enter the class of stock that was exchanged. Left-justify the
information and fill unused positions with blanks.
July 23, 20071932007–30 I.R.B.

(8) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–CAP (Continued)
Field
Position
Field TitleLength Description and Remarks
626Blank1Enter a blank.
627Shareholder
Indicator
1Enter a “1” (one) if the shareholder cannot take a loss on their tax
return. Otherwise, enter a blank.
628–662 Blank35Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–CAP
BlankDate of Sale or
Exchange
BlankNumber of Shares
Exchanged
Classes of Stock
Exchanged
544–547548–555556–607608–615616–625
BlankShareholder
Indicator
BlankSpecial Data
Entries
BlankBlank
or CR/LF
626627628–662663–722723–748749–750
(9) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–DIV
Field
Position
Field TitleLength Description and Remarks
544Second TIN
Notice
(Optional)
1Enter “2” (two) to indicate notification by IRS twice within three
calendar years that the payee provided an incorrect name and/or
TIN combination; otherwise, enter a blank.
545–546 Blank2Enter blanks.
547–586 Foreign Country
or U.S.
Possession
40Enter the name of the foreign country or U.S. possession to which
the withheld foreign tax (Amount Code C) applies. Otherwise, enter
blanks.
587–662 Blank76Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
2007–30 I.R.B.194July 23, 2007

(9) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–DIV (Continued)
Field
Position
Field TitleLength Description and Remarks
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table 1. For those payers or states not
participating in this program, enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–DIV
Second
TIN
Notice
(Optional)
BlankForeign
Country
or U.S.
Possession
BlankSpecial
Data Entries
544545–546547–586587–662663–722
State Income Tax
Withheld
Local Income Tax
Withheld
Combined
Federal/State
Code
Blank
or CR/LF
723–734735–746747–748749–750
(10) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–G
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Trade or
Business
Indicator
1Enter “1” (one) to indicate the state or local income tax refund,
credit, or offset (Amount Code 2) is attributable to income tax that
applies exclusively to income from a trade or business.
IndicatorUsage
1Income tax refund applies exclusively to a trade
or business.
BlankIncome tax refundis a general tax refund.
548–551 Tax Year of
Refund
4Enter the tax year for which the refund, credit, or offset (Amount
Code 2) was issued.The tax year must reflect the tax year for
which the payment was made, not the tax year of Form 1099–G.
The tax year must be in the four-position format of YYYY (e.g.,
2007).The valid range of years for the refund is 1997 through 2006.
Note: This data is not considered prior year data since it is required to be reported in the current tax year. Do NOT enter
“P” in field position 6 of theTransmitter “T” Record.
552–662 Blank111Enter blanks.
July 23, 20071952007–30 I.R.B.

(10) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–G (Continued)
Field
Position
Field TitleLength Description and Remarks
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. You may enter your routing and transit number
(RTN) here. If this field is not utilized, enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table 1. For those payers or states not
participating in this program, enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–G
BlankTrade or
Business
Indicator
Tax Year
of
Refund
BlankSpecial Data
Entries
State
Income
Tax
Withheld
544–546547548–551552–662663–722723–734
Local Income
Tax Withheld
Combined
Federal/State
Code
Blank
or CR/LF
735–74
6
747–74
8
749–75
0
(11) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–H
Field
Position
Field TitleLength Description and Remarks
544–5
46
Blank3Enter
blanks.
547–548 Number of
Months Eligible
2Required.Enter the total number of months recipient is eligible for
health insurance advance payments. Right-justify and blank fill
any remaining position.
549–662 Blank114Enter blanks.
2007–30 I.R.B.196July 23, 2007

(11) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–H (Continued)
Field
Position
Field TitleLength Description and Remarks
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–H
BlankNumber of
Months Eligible
BlankSpecial Data
Entries
BlankBlank
or CR/LF
544–546547–548549–662663–722723–748749–750
(12) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–INT
Field
Position
Field TitleLength Description and Remarks
544Second TIN
Notice
(Optional)
1Enter “2” (two) to indicate notification by IRS twice within three
calendar years that the payee provided an incorrect name and/or
TIN combination; otherwise, enter a blank.
545–546 Blank2Enter blanks.
547–586 Foreign Country
or U.S.
Possession
40Enter the name of the foreign country or U.S. possession to which
the withheld foreign tax (Amount Code 6) applies. Otherwise, enter
blanks.
587–662 Blank76Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. You may enter your routing and transit number
(RTN) here. If this field is not utilized, enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table 1. For those payers or states not
participating in this program, enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
July 23, 20071972007–30 I.R.B.

Payee “B” Record — Record Layout Positions 544–750 for Form 1099–INT
Second
TIN
Notice
(Optional)
BlankForeign
Country
or U.S.
Possession
BlankSpecial
Data Entries
State Income
Tax Withheld
544545–546547–586587–662663–722723–734
Local
Income
Tax
Withheld
Combined
Federal/State
Code
Blank
or CR/LF
735–746747–748749–750
(13) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–LTC
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Type of
Payment
Indicator
1Enter the appropriate indicator from the following table; otherwise,
enter blanks.
IndicatorUsage
1Per diem
2Reimbursed amount
548–556 Social Security
Number of
Insured
9Required.Enter the Social Security Number of the insured.
557–596 Name of
Insured
40Required.Enter the name of the insured.
597–636 Address of
Insured
40Required.Enter the address of the insured. Street address should
include number, street, apartment or suite number (or PO Box if
mail is not delivered to street address). Left-justify information and
fill unused positions with blanks. This fieldmust notcontain any
data other than payee’s address.
ForU.S.addresses,the payee city, state, and ZIP Code must be reported as a 40, 2, and 9-position field, respectively.Filers
must adhere to the correct format for theinsured’s city, state, and ZIP Code.
For foreign addresses,filers may use the insured’s city, state, and ZIP Codeas a continuous 51-position field. Enter information
in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the
Foreign Country Indicator in position 247 must contain a “1” (one).
637–676 City of Insured40Required.Enter the city, town, or post office. Left-justify
information and fill the unused positions with blanks. Enter APO
or FPO, if applicable. Do not enter state and ZIP Code information
in this field.
677–678 State of Insured2Required. Enter the valid U.S. Postal Service state abbreviations
for states or the appropriate postal identifier (AA, AE, or AP)
described in Part A, Sec. 14.
2007–30 I.R.B.198July 23, 2007

(13) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–LTC (Continued)
Field
Position
Field TitleLength Description and Remarks
679–687 ZIP Code of
Insured
9Required.Enter the valid nine-digit ZIP Code assigned by the U.S.
Postal Service. If only the first five-digits are known, left-justify
information and fill the unused positions with blanks. For foreign
countries, alpha characters areacceptable as long as the filer has
entered a “1” (one) in the Foreign Country Indicator, located in
position 247 of the “B” Record.
688Status of Illness
Indicator
(Optional)
1Enter the appropriate code from the table below to indicate the status
of the illness of the insured; otherwise, enter blank.
IndicatorUsage
1Chronically ill
2Terminally ill
689–696 Date Certified
(Optional)
8Enter the latest date of a doctor’scertification of the status of the
insured’s illness. The format of the date is YYYYMMDD (e.g.,
January 5, 2007, would be 20070105).Do not enter hyphens or
slashes.
697Qualified
Contract
Indicator
(Optional)
1Enter a “1” (one) if benefits werefrom a qualified long-term care
insurance contract; otherwise, enter a blank.
698–722 Blank25Enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled.
747–748 Blank2Enter blanks.
749–750 Blank2Enter blank or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–LTC
BlankType of
Payment
Indicator
SSN of
Insured
Name of
Insured
Address
of Insured
City of
Insured
State of
Insured
ZIP Code
of Insured
544–546547548–556557–596597–636637–676677–678679–687
Status of
Illness
Indicator
(Optional)
Date
Certified
(Optional)
Qualified
Contract
Indicator
(Optional)
BlankState
Income
Tax
Withheld
Local
Income
Tax
Withheld
BlankBlank
or CR/LF
688689–696697698–722723–734735–746747–748749–750
July 23, 20071992007–30 I.R.B.

(14) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–MISC
Field
Position
Field TitleLength Description and Remarks
544Second TIN
Notice
(Optional)
1Enter “2” (two) to indicate notification by IRS twice within three
calendar years that the payee provided an incorrect name and/or
TIN combination; otherwise, enter a blank.
545–546 Blank2Enter blanks.
547Direct Sales
Indicator
(See Note.)
1
Enter a “1” (one) to indicate sales of $5,000 or more of consumer
products to a person on a buy-sell, deposit-commission, or any other
commission basis for resale anywhere other than in a permanent
retail establishment. Otherwise, enter a blank.
Note: If repo
rting a direct sales indicatoronly, use Type of Return “A” in Field Position 27, and Amount Code 1 in Field
Position 28 o
f the Payer “A” Record. All paymentamountfieldsinthePayee“B” Record will contain zeros.
548–662 Blank115Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not used, enter blanks.
723–734 State Inco
me
Tax Withhe
ld
12State inco
me tax withheld is for the convenience of the filers. This
informati
on does not need to be reported to IRS. The payment
amount mus
t be right-justified and unused positions must be
zero-fill
ed. If not reporting state tax withheld, this field may be used
as a conti
nuation of the Special Data Entries Field.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table 1. For those payers or states not
participating in this program, enter blanks.
749–75
0
Blank2Enter b
lanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–MISC
Second
TIN
Notice
(Optional)
BlankDirect
Sales Indicator
BlankSpecial
Data Entries
State Income
Tax
Withheld
Local
Income
Tax
Withheld
544545–5
46
547548–6
62
663–7
22
723–7
34
735–7
46
Combined
Federal/State
Code
Blank
or CR/LF
747–748749–750
2007–30 I.R.B.200July 23, 2007

(15) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–OID
Field
Position
Field TitleLength Description and Remarks
544Second TIN
Notice
(Optional)
1Enter “2” (two) to indicate notification by IRS twice within three
calendar years that the payee provided an incorrect name and/or
TIN combination; otherwise, enter a blank.
545–546 Blank2Enter blanks.
547–585 Description39Required.Enter the CUSIP number, if any. If there is no CUSIP
number, enter the abbreviation for the stock exchange and issuer,
the coupon rate, and year (must be 4-digit year) of maturity (e.g.,
NYSE XYZ 12/2007). Show the name of the issuer if other than
the payer. If fewer than 39 characters are required, left-justify
information and fill unused positions with blanks.
586–662 Blank77Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table l. For those payers or states not
participating in this program, enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–OID
Second
TIN
Notice
(Optional)
BlankDescriptionBlankSpecial
Data Entries
State
Income
Tax
Withheld
544545–546547–585586–662663–722723–734
Local
Income
Tax
Withheld
Combined
Federal/State
Code
Blank
or CR/LF
735–746747–748749–750
July 23, 20072012007–30 I.R.B.

(16) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–PATR
Field
Position
Field TitleLength Description and Remarks
544Second
TIN
Notice
(Optional)
1Enter “2” (two) to indicate notification by IRS twice within three
calendar years that the payee provided an incorrect name and/or
TIN combination; otherwise, enter a blank.
545–662 Blank118Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If field is not utilized, enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table 1. For those payers or states not
participating in this program, enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for 1099–PATR
Second
TIN
Notice
(Optional)
BlankSpecial
Data Entries
State Income
Tax
Withheld
Local
Income Tax
Withheld
Combined
Federal/State
Code
Blank
or CR/LF
544545–662663–722723–734735–746747–748749–750
(17) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–Q
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Trustee to
Trustee
Transfer
Indicator
1Required.Enter a “1” (one) if reporting atrustee to trustee transfer;
otherwise, enter a blank.
2007–30 I.R.B.202July 23, 2007

(17) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–Q (Continued)
Field
Position
Field TitleLength Description and Remarks
548Type of
Tuition
Payment
1Required.Enter the appropriate code from the table below to
indicate the type of tuition payment; otherwise, enter a blank.
IndicatorUsage
1Private program payment
2State program payment
3Coverdell ESA contribution
549Designated
Beneficiary
1Required.Enter a “1” (one) if the recipient is not the designated
beneficiary; otherwise, enter a blank.
550–662 Blank113Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–Q
BlankTrustee to
Trustee
Transfer
Indicator
Type of
Tuition
Payment
Designated
Beneficiary
BlankSpecial
Data Entries
BlankBlank or
CR/LF
544–546547548549550–662663–722723–748749–750
(18) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–R
Field
Position
Field TitleLength Description and Remarks
544Blank1Enter a blank.
545–546 Distribution Code
(For a detailed explanation of
distribution codes, see the2007
Instructions for Forms 1099–R
and 5498.)
See chart at the end of this record
layout for a diagram of valid
combinations of Distribution
Codes.
2Required.Enter at least one distribution code from the table below.
More than one code may apply. If only one code is necessary, it
must be entered in position 545 and position 546 will be blank.
When using Code P for an IRA distribution under section 408(d)(4)
of the Internal Revenue Code, the filer may also enter Code 1, 2, 4,
or J if applicable. Only three numeric combinations are acceptable,
Codes 8 and 1, 8 and 2, and 8 and 4, on one return. These three
combinations can be used only if both codes apply to the distribution
being reported. If more than one numeric code is applicable to
different parts of a distribution,report two separate “B” Records.
Distribution Codes 3, 5, 6, 9, E, F, N, Q, R, S and T cannot be
used with any other codes. Distribution Code G may be used with
Distribution Code 4 only if applicable.
July 23, 20072032007–30 I.R.B.

(18) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–R (Continued)
Field
Position
Field TitleLength Description and Remarks
CodeCategory
1*Early distribution, no known exception (in most
cases, under age 59
1
/2)
2*Early distribution, exception applies (Under age
59
1
/2)
3*Disability
4*Death
5*Prohibited transaction
6Section 1035 exchange (a tax-free exchange of life
insurance, annuity, or endowment contracts)
7*Normal distribution
8*Excess contributions plus earnings/excess
deferrals (and/or earnings) taxable in2007
9Cost of current life insurance protection (premiums
paid by a trustee or custodian for current insurance
protection)
AMay be eligible for 10-year tax option
BDesignated Roth account distribution
D*Excess contributions plus earnings/excess
deferrals taxable in2005
EExcess annual additions under section 415/certain
excess amounts under section 403(b) plans
FCharitable gift annuity
GDirect rollover and rollover contribution
JEarly distribution from a Roth IRA. (This code may
be used with Code 8 or P.)
LLoans treated as deemed distributions under section
72(p)
NRecharacterized IRA contribution made for2007
P*Excess contributions plus earnings/excess
deferrals taxable in2006
QQualified distribution from a Roth IRA.
(Distribution from a Roth IRA when the 5-year
holding period has been met, and the recipient has
reached 59
1
/2, has died, or is disabled.)
RRecharacterized IRA contribution made for2006
(See Note.)
S*EarlydistributionfromaSIMPLEIRAinfirst2
years, no known exception
TRoth IRA distribution, exception applies because
participant has reached 59
1
/2, died or is disabled,
but it is unknown if the 5-year period has been met.
2007–30 I.R.B.204July 23, 2007

(18) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–R (Continued)
Field
Position
Field TitleLength Description and Remarks
*If reporting a traditional IRA, SEP, or SIMPLE distribution or a Roth conversion, use the IRA/SEP/SIMPLE Indicator
of “1” (one) in position 548 of the Payee “B” Record.
Note: The trustee of the first IRA must report the recharacterization as a distribution on Form 1099–R (and the original
contribution and its character on Form 5498).
547Taxable Amount
Not Determined
Indicator
1Enter “1” (one) only if the taxable amount of the payment entered
for Payment Amount Field 1 (Gross distribution) of the “B” Record
cannot be computed; otherwise, enter blank. (If Taxable Amount
Not Determined Indicator is used, enter “0’s” [zeros] in Payment
Amount Field 2 of the Payee “B” Record.) Please make every effort
to compute the taxable amount.
548IRA/SEP/SIMPLE
Indicator
1Enter “1” (one) for a traditional IRA, SEP, or SIMPLE distribution
or Roth conversion; otherwise, enter a blank.(See Note.)If the
IRA/SEP/SIMPLE Indicator is used, enter the amount of the Roth
conversion or distribution in Payment Amount Field A of the Payee
“B” Record.Do not use the indicator for a distribution from a
Roth or for an IRA recharacterization.
Note: For Form 1099–R, generally, report the Roth conversion or total amount distributed from a traditional IRA, SEP,
or SIMPLE in Payment Amount Field A (traditional IRA/SEP/SIMPLE distribution or Roth conversion), as well as
Payment Amount Field 1 (Gross Distribution) of the “B” Record. Refer to the2007 Instructions for Forms 1099–R and
5498forexceptions(Box2ainstructions).
549Total Distribution
Indicator
(See Note.)
1Enter a “1” (one) only if the payment shown for Distribution
Amount Code 1 is a total distribution that closed out the account;
otherwise, enter a blank.
Note: A total distribution is one or more distributions within one tax year in which the entire balance of the account is
distributed. Any distribution that does not meet this definition is not a total distribution.
550–551 Percentage of Total
Distribution
2Use this field when reporting a total distribution to more than
one person, such as when a participant is deceased and a payer
distributes to two or more beneficiaries. Therefore, if the percentage
is 100, leave this field blank. If the percentage is a fraction, round
off to the nearest whole number (for example, 10.4 percent will be
10 percent; 10.5 percent will be 11 percent). Enter the percentage
received by the person whose TIN is included in positions 12–20
of the “B” Record. This field must be right-justified, and unused
positions must be zero-filled. If not applicable, enter blanks. Filers
are not required to enter this information for any IRA distribution or
for direct rollovers.
552–555 First Year of Designated Roth
Contribution
4Enter the first year a designated Roth contribution was made in
YYYY format. If the date is unavailable, enter blanks.
556–662 Blank107Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–734 State Income Tax
Withheld
12State income tax withheld is for the convenience of the filer. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
July 23, 20072052007–30 I.R.B.

(18) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–R (Continued)
Field
Position
Field TitleLength Description and Remarks
735–746 Local Income Tax
Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table 1. For those payers or states not
participating in this program, enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
FORM 1099–R DISTRIBUTION CODE CHART 2007
2007–30 I.R.B.206July 23, 2007

Payee “B” Record — Record Layout Positions 544–750 for Form 1099–R
BlankDistribution
Code
Taxable
Amount Not
Determined
Indicator
IRA/SEP/SIMPLE
Indicator
Total
Distribution
Indicator
Percentage
of Total
Distribution
544545–546547548549550–551
First Year of
Designated Roth
Contribution
BlankSpecial
Data Entries
State Income
Tax Withheld
Local Income
Tax Withheld
Combined
Federal/State
Code
Blank
or CR/LF
552–555556–662663–722723–734735–746747–748749–750
(19) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–S
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Property or
Services
Indicator
1Required.Enter “1” (one) if the transferor received or will receive
property (other than cash and consideration treated as cash in
computing gross proceeds) or services as part of the consideration
for the property transferred. Otherwise, enter a blank.
548–555 Date of Closing8Required.Enter the closing date in the format YYYYMMDD (e.g.,
January 5, 2007, would be 20070105).Do not enter hyphens or
slashes.
556–594 Address or Legal
Description
39Required.Enter the address of the property transferred (including
city, state, and ZIP Code). If the address does not sufficiently
identify the property, also enter alegal description, such as section,
lot, and block. For timber royalties, enter “TIMBER.” If fewer than
39 positions are required, left-justify information and fill unused
positions with blanks.
595–662 Blank68Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–734 State Income Tax
Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
735–746 Local Income
Tax
Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
July 23, 20072072007–30 I.R.B.

(19) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–S (Continued)
Field
Position
Field TitleLength Description and Remarks
747–748 Blank2Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–S
BlankProperty
or Services
Indicator
Date of
Closing
Address
or Legal
Description
BlankSpecial
Data Entries
544–546547548–555556–594595–662663–722
State Income
Tax Withheld
Local Income
Tax Withheld
BlankBlank
or CR/LF
723–734735–746747–748749–750
(20) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–SA
Field
Position
Field TitleLength Description and Remarks
544Blank1Enter a blank.
545Distribution
Code
1Required.Enter the applicable code to indicate the type of payment.
CodeCategory
1Normal distribution
2Excess contribution
3Disability
4Death distribution otherthan code 6 (This includes
distributions to a spouse, nonspouse, or estate
beneficiary in the year of death and to an estate
after the year of death.)
5Prohibited transaction
6Death distributionafteryearofdeathto a
nonspouse beneficiary. (Do not use for distribution
to an estate.)
546Blank1Enter a blank.
547Medicare
Advantage
MSA
Indicator
1Enter “1” (one) if distributions are from a Medicare Advantage
MSA. Otherwise, enter a blank.
548HSA Indicator1Enter “1” (one) if distributions are from a HSA.Otherwise, enter
a blank.
549Archer MSA
Indicator
1Enter “1” (one) if distributions are from an Archer MSA. Otherwise,
enter a blank.
2007–30 I.R.B.208July 23, 2007

(20) Payee “B” Record — Record Layout Positions 544–750 for Form 1099–SA (Continued)
Field
Position
Field TitleLength Description and Remarks
550–662 Blank113Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting statetax withheld, this field may be used
as a continuation of the Special Data Entries Field.
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be
used as a continuation of the Special Data Entries Field.
747–748 Blank2Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 1099–SA
BlankDistribution
Code
BlankMedicare
Advantage
MSA
Indicator
HSA
Indicator
Archer
MSA
Indicator
BlankSpecial
Data Entries
544545546547548549550–662663–722
State
Income Tax
Withheld
Local
Income
Tax
Withheld
BlankBlank
or CR/LF
723–734735–746747–748749–750
(21) Payee “B” Record — Record Layout Positions 544–750 for Form 5498
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547IRAIndicator
(Individual
Retirement
Account)
1Required, if applicable.Enter “1” (one) if reporting a Rollover
(Amount Code 2), Recharacterized Contribution (Amount Code
4) or Fair Market Value (Amount Code 5) for an IRA. Otherwise,
enter a blank.
July 23, 20072092007–30 I.R.B.

(21) Payee “B” Record — Record Layout Positions 544–750 for Form 5498 (Continued)
Field
Position
Field TitleLength Description and Remarks
548SEP
Indicator
(Simplified
Employee
Pension)
1Required, if applicable.Enter “1” (one) if reporting Rollover
(Amount Code 2), Recharacterized Contribution (Amount Code
4) or Fair Market Value (Amount Code 5) for a SEP. Otherwise,
enter a blank.
549SIMPLEIndicator
(SavingsIncentive
MatchPlan for
Employees)
1Required, if applicable.Enter “1” (one) if reporting a Rollover
(Amount Code 2), Recharacterized Contribution (Amount Code 4)
or Fair Market Value (Amount Code 5) for a SIMPLE. Otherwise,
enter a blank.
550Roth IRA
Indicator
1Required, if applicable.Enter “1” (one) if reporting a Rollover
(Amount Code 2), Recharacterized Contribution (Amount Code 4)
or Fair Market Value (Amount Code 5) for a Roth IRA. Otherwise,
enter a blank.
551RMD Indicator1Required.Enter “1” (one) if reporting RMD for 2007. Otherwise,
enter a blank.
552–662 Blank111Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record may be used to record information
for state or local government reporting or for the filer’s own
purposes. Payers should contact the state or local revenue
departments for filing requirements. If this field is not utilized, enter
blanks.(See Note.)
Note: For delayed contributions for U.S. Armed Forces, usethe Special Data Entry field to report the year for which the
contribution was made, the amount of the contribution and one of the indicators as outlined in the current Instructions for
Forms 1099–R and 5498.
723–746 Blank24Enter blanks.
747–748 Combined
Federal/State
Code
2If this payee record is to be forwardedtoastateagencyaspartof
the Combined Federal/State Filing Program, enter the valid state
code from Part A, Sec. 12, Table 1. For those payers or states not
participating in this program, enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record LayoutPositions 544–750 for Form 5498
BlankIRA
Indicator
SEP
Indicator
SIMPLE
Indicator
Roth
IRA
Indicator
RMD
Indicator
544–546547548549550551
BlankSpecial
Data
Entries
BlankCombined
Federal/State
Code
Blank
or CR/LF
552–662663–722723–746747–748749–750
2007–30 I.R.B.210July 23, 2007

(22) Payee “B” Record — Record Layout Positions 544–750 for Form 5498–ESA
Field
Position
Field TitleLength Description and Remarks
544–662 Blank119Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 5498–ESA
BlankSpecial Data
Entries
BlankBlank
or CR/LF
544–662663–722723–748749–750
(23) Payee “B” Record — Record Layout Positions 544–750 for Form 5498–SA
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Medicare
Advantage
MSA
Indicator
1Enter “1” (one) for Medicare Advantage MSA. Otherwise, enter
a blank.
548HSA Indicator1Enter “1” (one) for HSA. Otherwise, enter a blank.
549Archer MSA
Indicator
1Enter “1” (one) for Archer MSA. Otherwise, enter a blank.
550–662 Blank113Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–748 Blank26Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record Layout Positions 544–750 for Form 5498–SA
BlankMedicare
Advantage
MSA
Indicator
HSA
Indicator
Archer
MSA
Indicator
BlankSpecial
Data Entries
BlankBlank
or CR/LF
544–546547548549550–662663–722723–748749–750
July 23, 20072112007–30 I.R.B.

(24) Payee “B” Record — Record Layout Positions 544–750 for Form W–2G
Field
Position
Field TitleLength Description and Remarks
544–546 Blank3Enter blanks.
547Type of Wager
Code
1Required.Enter the applicable type of wager code from the table
below.
CodeCategory
1Horse race track (or off-track betting of a horse
track nature)
2Dog race track (or off-track betting of a dog track
nature)
3Jai-alai
4State-conducted lottery
5Keno
6Bingo
7Slot machines
8Any other type of gambling winnings
548–555 Date Won8Required.Enter the date of the winning transaction in the format
YYYYMMDD (e.g., January 5, 2007, would be 20070105).Do not
enter hyphens or slashes.This is not the date the money was paid,
if paid after the date of the race (or game).
556–570 Transaction15Required.For state-conducted lotteries, enter the ticket or other
identifying number. For keno, bingo, and slot machines, enter the
ticket or card number (and color, if applicable), machine serial
number, or any other information that will help identify the winning
transaction. For all others, enter blanks.
571–575 Race5If applicable, enter the race (or game) relating to the winning ticket;
otherwise, enter blanks.
576–580 Cashier5If applicable, enter the initials or number of the cashier making the
winning payment; otherwise, enter blanks.
581–585 Window5If applicable, enter the window number or location of the person
paying the winning payment; otherwise, enter blanks.
586–600 First ID15For other than state lotteries, enter the first identification number of
the person receiving the winnings; otherwise, enter blanks.
601–615 Second ID15For other than state lotteries, enter the second identification number
of the person receiving the winnings; otherwise, enter blanks.
616–662 Blank47Enter blanks.
663–722 Special Data
Entries
60This portion of the “B” Record maybeusedtorecordinformationfor
state or local government reporting or for the filer’s own purposes.
Payers should contact the state or local revenue departments for
filing requirements. If this field is not utilized, enter blanks.
723–734 State Income
Tax Withheld
12State income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting state tax withheld, this field may be used
as a continuation of the Special Data Entries field.
2007–30 I.R.B.212July 23, 2007

(24) Payee “B” Record — Record Layout Positions 544–750 for Form W–2G (Continued)
Field
Position
Field TitleLength Description and Remarks
735–746 Local Income
Tax Withheld
12Local income tax withheld is for the convenience of the filers. This
information does not need to be reported to IRS. The payment
amount must be right-justified and unused positions must be
zero-filled. If not reporting local tax withheld, this field may be used
as a continuation of the Special Data Entries field.
747–748 Blank2Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Payee “B” Record — Record LayoutPositions 544–750 for Form W–2G
BlankType of
Wager
Code
Date
Won
TransactionRaceCashierWindowFirst ID
544–546547548–555556–570571–575576–580581–585586–600
Second IDBlankSpecial Data
Entries
State Income
Tax
Withheld
Local
Income
Tax
Withheld
BlankBlank
or CR/LF
601–615616–662663–722723–734735–746747–748749–750
Sec. 7. End of Payer “C” Record — General Field Descriptions and Record Layout
.01The “C” Record consists of the total number of payees and the totals of the payment amount fields filed for each payer and/or
particular type of return. The “C” Record must follow thelast “B” Record for each type of return for each payer.
.02For each “A” Record and group of “B” Records on the file, there must be a corresponding “C” Record.
.03The End of Payer “C” Record is a fixedlength of 750 positions. The control fields are each 18 positions in length.
Record Name: End of Payer “C” Record
Field
Position
Field TitleLength Description and Remarks
1Record Type1Required.Enter “C”.
2–9Number of
Payees
8Required.Enter the total number of “B” Records covered by the
preceding “A” Record. Right-justify information and fill unused
positions with zeros.
10–15Blank6Enter blanks.
July 23, 20072132007–30 I.R.B.

Record Name: End of Payer “C” Record (Continued)
Field
Position
Field TitleLength Description and Remarks
16–33Control Total 118
34–51Control Total 218
52–69Control Total 318
70–87Control Total 418
88–105Control Total 518
106–123 Control Total 618
124–141 Control Total 718
142–159 Control Total 818
160–177 Control Total 918
178–195 Control Total A18
196–213 Control Total B18
214–231 Control Total C18
232–249 Control Total D18
250–267 Control Total E18
Required.Accumulate totals of any payment amount fields in the
“B” Records into the appropriate control total fields of the “C”
Record.Control totals must be right-justified and unused control
total fields zero-filled.All control total fields are 18 positions in
length. Each payment amount must contain U.S. dollars and cents.
The right-most two positions represent cents in the payment amount
fields.Do not enter dollar signs, commas, decimal points, or
negative payments, except thoseitems that reflect a loss on Form
1099–B or 1099–Q.Positive and negative amounts are indicated by
placing a “+” (plus) or “-” (minus) sign in the left-most position of
the payment amount field.
268–499 Blank232Enter blanks.
500–507 Record Sequence
Number
8Required.Enter the number of the record as it appears within
your file. The record sequencenumber for the “T” record will
always be “1” (one), since it is the first record on your file and you
can have only one “T” record in a file. Each record, thereafter,
must be incremented by one inascending numerical sequence,
i.e., 2, 3, 4, etc. Right-justify numbers with leading zeros in
the field. For example, the “T” record sequence number would
appear as “00000001” in the field, the first “A” record would be
“00000002”, the first “B” record, “00000003”, the second “B”
record, “00000004” and so on until you reach the final record of
the file, the “F” record.
508–748 Blank241Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
End of Payer “C” Record — Record Layout
Record
Type
Number of
Payees
BlankControl
Total
1
Control
Total
2
Control
Total
3
Control
Total
4
Control
Total
5
Control
Total
6
12–910–1516–3334–5152–6970–8788–105106–123
Control
Total
7
Control
Total
8
Control
Total
9
Control
Total
A
Control
Total
B
Control
Total
C
Control
Total
D
Control
Total
E
Blank
124–141142–159160–177178–195196–213214–231232–249250–267268–499
2007–30 I.R.B.214July 23, 2007

Record
Sequence
Number
BlankBlank
or CR/LF
500–507508–748749–750
Sec. 8. State Totals “K” Record — GeneralField Descriptions and Record Layout
.01The State Totals “K” Record is a summary for a given payer and agiven state in the Combined Federal/State Filing Program,
usedonlywhen state-reporting approval has been granted.
.02The “K” Record will contain the total number of payees and thetotal of the payment amount fields filed by a given payer for
a given state. The “K” Record(s) must be written after the “C” Record for the related “A”Record. A file format diagram is located
at the end of Part D.
.03The “K” Record is a fixed length of 750 positions. The control total fields are each18 positions in length.
.04In developing the “K” Record, for example, if a payer usedAmount Codes 1, 3, and 6 in the “A” Record, the totals from the
“B” Records coded for this statewould appear in Control Totals 1, 3, and 6 of the “K” Record.
.05There must be a separate “K” Record foreach statebeing reported.
.06Refer to Part A, Sec. 12, for the requirements and conditions thatmustbe met to file via this program.
Record Name: State Totals “K” Record — RecordLayout Forms 1099–DIV, 1099–G, 1099–INT,
1099–MISC, 1099–OID, 1099–PATR, 1099–R, and 5498
Field
Position
Field TitleLength Description and Remarks
1Record
Type
1Required.Enter “K”.
2–9Number of
Payees
8Required.Enter the total number of “B” Records being coded for
this state. Right-justify information and fill unused positions with
zeros.
10–15Blank6Enter blanks.
16–33Control Total 118
34–51Control Total 218
52–69Control Total 318
70–87Control Total 418
88–105Control Total 518
106–123 Control Total 618
124–141 Control Total 718
142–159 Control Total 818
160–177 Control Total 918
178–195 Control Total A18
196–213 Control Total B18
214–231 Control Total C18
232–249 Control Total D18
250–267 Control Total E18
Required.Accumulate totals of any payment amount fields in
the “B” Records for each state being reported into the appropriate
control total fields of the appropriate “K” Record. Each payment
amount must contain U.S. dollarsand cents. The right-most two
positions represent cents in the payment amount fields.Control
totals must be right-justified and unused control total fields
zero-filled.All control total fields are 18 positions in length.
268–499 Blank232Enter blanks.
July 23, 20072152007–30 I.R.B.

Record Name: State Totals “K” Record — Record Layout Forms 1099–DIV, 1099–G, 1099–INT,
1099–MISC, 1099–OID, 1099–PATR, 1099–R, and 5498 (Continued)
Field
Position
Field TitleLength Description and Remarks
500–507 Record Sequence
Number
8Required.Enter the number of the record as it appears within
your file. The record sequencenumber for the “T” record will
always be “1” (one), since it is the first record on your file and you
can have only one “T” record in a file. Each record, thereafter,
must be incremented by one inascending numerical sequence,
i.e., 2, 3, 4, etc. Right-justify numbers with leading zeros in
the field. For example, the “T” record sequence number would
appear as “00000001” in the field, the first “A” record would be
“00000002”, the first “B” record, “00000003”, the second “B”
record, “00000004” and so on until you reach the final record of
the file, the “F” record.
508–706 Blank199Enter blanks.
707–724 State Income
TaxWithheldTotal
18State income tax withheld total is for the convenience of the filers.
Aggregate totals of thestate income tax withheld field in the Payee
“B” Records; otherwise, enter blanks.
725–742 Local Income
TaxWithheldTotal
18Local income tax withheld total is for the convenience of the filer.
Aggregate totals of the local income tax withheld field in the Payee
“B” Records; otherwise, enter blanks.
743–746 Blank4Enter blanks.
747–748 Combined
Federal/State
Code
2Required.Enter the code assigned to the state which is to receive
the information. (Refer to Part A, Sec. 12, Table l.)
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
State Totals “K” Record — Record Layout Forms 1099–DIV, 1099–G, 1099–INT, 1099–MISC,
1099–OID, 1099–PATR, 1099–R, and 5498
Record
Type
Number of
Payees
BlankControl
Total
1
Control
Total
2
Control
Total
3
Control
Total
4
Control
Total
5
Control
Total
6
12–910–1516–3334–5152–6970–8788–105106–123
Control
Total
7
Control
Total
8
Control
Total
9
Control
Total
A
Control
Total
B
Control
Total
C
Control
Total
D
Control
Total
E
Blank
124–141142–159160–177178–195196–213214–231232–249250–267268–499
Record
Sequence
Number
BlankState Income
Tax
Withheld
Total
Local
Income
Tax
Withheld
Total
BlankCombined
Federal/State
Code
Blank
or CR/LF
500–507508–706707–724725–742743–746747–748749–750
2007–30 I.R.B.216July 23, 2007

Sec. 9. End of Transmission “F” Record — General Field Descriptions and Record Layout
.01The End of Transmission “F” Record is a summary ofthe number of payers/payees in the entire file.
.02The “F” Record is a fixed record length of 750 positions.
.03This record must be written after the last “C” Record (or last “K” Record, when applicable) of the entire file.
Record Name: End of Transmission “F” Record
Field
Position
Field TitleLength Description and Remarks
1Record Type1Required.Enter “F.”
2–9Number of “A” Records8Enter the total number of Payer “A” Records in the entire file
(right-justify and zero-fill) or enter all zeros.
10–30Zero21Enter zeros.
31–49Blank19Enter blanks.
50–57Total Number of
Payees
8Enter the total number of Payee “B” Records reported in the file.
Right-justify information and fill unused positions with zeros. If
you have entered this total in the “T” Record, you may leave this
field blank.
58–499Blank442Enter blanks.
500–507 Record Sequence Number8Required.Enter the number of the record as it appears within
your file. The record sequencenumber for the “T” record will
always be “1” (one), since it is the first record on your file and you
can have only one “T” record in a file. Each record, thereafter,
must be incremented by one inascending numerical sequence,
i.e., 2, 3, 4, etc. Right-justify numbers with leading zeros in
the field. For example, the “T” record sequence number would
appear as “00000001” in the field, the first “A” record would be
“00000002”, the first “B” record, “00000003”, the second “B”
record, “00000004” and so on until you reach the final record of
the file, the “F” record.
508–748 Blank241Enter blanks.
749–750 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
End of Transmission “F” Record — Record Layout
Record
Type
Number of
“A”
Records
ZeroBlankTotal
Number
of Payees
BlankRecord
Sequence
Number
BlankBlank
or CR/LF
12–910–3031–4950–5758–499500–507508–748749–750
July 23, 20072172007–30 I.R.B.

Sec. 10. File Layout Diagram
Part E. Extensions of Time and Waivers
Sec. 1. General — Extensions
.01An extension of time to file may be requested for Forms 1098, 1099, 5498, 5498–SA, 5498–ESA, W–2G, W–2 series, 8027
and 1042–S.
.02A paper Form 8809, Application for Extension of Time To File Information Returns, should be submitted to IRS/ECC-MTB at
the address listed in .09 of this section. This form may be used to request an extension of time to file information returns submitted on
paper, electronically or magnetically to the IRS. Use a separate Form 8809 for each method of filing information returns you intend
to use, i.e., electronically, magnetically or paper.
.03The fill-in Form 8809 may be completed online via the FIRE System. (See Part B, Sec. 8, for instructions on connecting to the
FIRE System.) At the Main Menu, click “Extension of Time Request” and then click “Fill-in Extension Form”. This option is only
used to request an automatic 30-day extension. If you are requesting an additional extension, you must submit a paper Form 8809.
Requests for an additional extension of time to file information returns are not automatically granted. Requests for additional time are
granted only in cases of extreme hardship or catastrophic event.The IRS will only send a letter of explanation approving or denying
your additional extension request. (Refer to .12 of this Section.)
.04To be considered, an extension request must be postmarked, transmitted or completed online by the due date of the returns;
otherwise, the request will be denied. (See Part A, Sec. 8, for due dates.)Ifrequestinganextensionof time to file several types of
forms, use one Form 8809; however, Form 8809 or file must be submitted no later than the earliest due date. For example, if requesting
an extension of time to file both Forms 1099–INT and 5498, submit Form 8809 on or before February 28, 2008.
.05 As soon as it is apparentthat a 30-day extension of time to file is needed, an extension request should be submitted. It may take
up to 30 days for IRS/ECC-MTB to respond to an extension request.IRS/ECC-MTB does not begin processing extension requests
until January.Extensions completed online via the FIRE System receive instant results.
.06Under certain circumstances, a request for an extension of time may be denied. When a denial letter is received, any additional
or necessary information may be resubmitted within 20 days.
.07Requesting an extension of time for multiple payers (50 or less) may be done by mailing Form 8809 and attaching a list of the
payer names and associated TINs (EIN or SSN) or by completing the fill-in form online. Each payer must be included in the listing or
2007–30 I.R.B.218July 23, 2007

completed online to ensure an extension is recorded for all payers. Form 8809 may be computer-generated or photocopied. Be sure
to use the most recently updated version andinclude all the pertinent information.
.08Requests for an extension of time to file for more than 50 payers arerequiredto be submitted electronically, magnetically
or completed online. IRS encourages requests for 10 to 50 payers to be filed electronically, magnetically or completed online.
(See Sec. 3, for the record layout.) Tape cartridge isthe only acceptable magnetic media. (Refer to Part C.)
.09All requests for an extension of time filed on Form 8809 or tape cartridge should be sent using the following address:
IRS-Enterprise Computing Center — Martinsburg
Information Reporting Program
Attn: Extension of Time Coordinator
240 Murall Drive
Kearneysville, WV 25430
Note: Due to the large volume of mail received by IRS/ECC-MTB and the time factor involved in processing Extension of
Time (EOT) requests, it is imperative that the attention line be present on all envelopes or packages containing Form 8809.
.10Requests for extensions of time to file postmarked by the United States Postal Service on or before the due date of the returns,
and delivered by United States mail to IRS/ECC-MTB after the due date, are treated astimely under the “timely mailing as timely
filing” rule. A similar rule applies to designated private delivery services (PDSs). See Part A, Sec. 8, for more information on PDSs.
For requests delivered by a designated PDS, but through a non-designated service, the actual date of receipt by IRS/ECC-MTB will
be used as the filing date.
.11Transmitters requesting an extension oftime by an electronic or magnetic file will receive an approval or denial letter, accom-
panied by a list of payers covered under that approval/denial.
.12If an additional extension of time is needed, a second Form 8809 or file must be filed by the initial extended due date. Check
line 7 on the form to indicate that an additional extension is being requested. A second 30-day extension will be approved only in
cases of extreme hardship or catastrophic event.If requesting a second 30-day extension of time, submit the information return
files as soon as prepared. Do not wait for IRS/ECC-MTB’s response to your second extension request.
.13If an extension request is approved, the approval notification should be kept on file.DO NOTsend the approval notification
or copy of the approval notification to IRS/ECC-MTB with the tape cartridge file or to the service center where the paper returns are
filed.
.14Request an extension for only one tax year.
.15A signature is not required when requesting a 30-day extension. If a second 30-day extension is requested, the Form 8809
MUSTbe signed. Failure to properly complete and sign Form 8809 may cause delays in processing the request or result in a denial.
Carefully read and follow the instructions on the back of Form 8809.
.16Form 8809 may be obtained by calling1–800–TAX–FORM (1–800–829–3676). The form is also available on theIRS website
at www.irs.gov. A copy of Form 8809 is also provided in the back of Publication 1220.
Sec. 2. Specifications for Electronic Filing or Tape Cartridge Extensions of Time
.01The specifications in Sec. 3 include the required 200-byte record layout for extensions of time to file requests submitted elec-
tronically or magnetically. Also included are the instructions for the information that is to be entered in the record.Filers are advised
to read this section in its entirety to ensure proper filing.
.02If a filer does not have an IRS/ECC-MTB assigned Transmitter Control Code (TCC), Form 4419, Application for Filing In-
formation Returns Electronically,mustbe submitted to obtain a TCC. This numbermustbe used to submit an extension request
electronically/magnetically. (See Part A, Sec. 6.)
.03For extension requests filed on tape cartridges, the transmitter must mail the completed Form 8809, Application for Extension
of Time To File Information Returns, in the same package as the corresponding media or fax it to 304–264–5602. For extension
requests filed electronically, the transmitter must fax Form 8809 the same day the transmission is made. Due to security concerns,
extension requests maynotbe emailed with the Form 8809 as an attachment.
.04 Transmitters submitting an extension of time electronically or magnetically shouldnotsubmitalistofpayernamesand
TINs with Form 8809 since this information is included on the electronicormagneticfile.However,Line6ofForm8809must
be completed with the total number of records included on the electronic or tape cartridge file. The fill-in Form 8809 c
annot
be used in lieu of the paper Form 8809 for electronic or tape cartridge files.
.05Do not submit tax year 2007 extension requests filed on tape cartridges beforeJanuary 1, 2008, or electronically beforeJanuary
3, 2008.
.06Each tape cartridgemusthave an external media label containing the following information:
(a)Transmitter name
(b)Transmitter Control Code (TCC)
(c)Tax year
July 23, 20072192007–30 I.R.B.

(d)The words “Extension of Time”
(e)Record count
.07Electronic filing, and tape cartridge specifications for extensions are the same as the specifications for filing of information
returns. (See Part B or C for specific technical information.)
Sec. 3. Record Layout — Extension of Time
.01Positions 6 through 188 of the following record should contain information about thepayerfor whom the extension of time to
file is being requested. Do not enter transmitter information in these fields.OnlyoneTCCmaybepresentinafile.
Record Layout for Extension of Time
Field
Position
Field TitleLength Description and Remarks
1–5Transmitter
Control Code
5Required. Enter the five-character alpha/numeric Transmitter
Control Code (TCC) issued by IRS.Only one TCC per file is
acceptable.
6–14Payer TIN9Required. Must be the valid nine-digit EIN/SSN assigned to the
payer.Do not enter blanks, hyphens or alpha characters.All
zeros, ones, twos, etc., will have the effect of an incorrect TIN. For
foreign entities that are not requiredtohaveaTIN,thisfieldmay
be blank; however, the Foreign Entity Indicator, position 187,must
be set to “X”.
15–54Payer Name40Required. Enter the name of the payer whose TIN appears in
positions 6–14. Left-justify information and fill unused positions
with blanks.
55–94Second Payer
Name
40If additional space is needed, this field may be used to continue
name line information (e.g., c/o First National Bank); otherwise;
enter blanks.
95–134Payer Address40Required. Enter the payer’s address. Street address should include
number, street, apartment or suite number (or PO Box if mail is
not delivered to a street address).
135–174 Payer City40Required. Enter payer city, town, or post office.
175–176 Payer State2Required. Enter the payer valid U.S. Postal Service state
abbreviation. (Refer to Part A, Sec. 14.)
177–185 Payer ZIP Code9Required. Enter payer ZIP Code. If using a five-digit ZIP Code,
left-justify information and fillunused positions with blanks.
186Document Indicator
(See Note.)
1Required. Enter the appropriate document code that indicates the
form for which you are requesting an extension of time.
CodeDocument
1W–2
21098, 1098–C, 1098–E, 1098–T, 1099–A, 1099–B,
1099–C, 1099–CAP, 1099–DIV, 1099–G, 1099–H,
1099–INT, 1099–LTC, 1099–MISC, 1099–OID,
1099–PATR, 1099–Q, 1099–R, 1099–S, 1099–SA,
or W–2G
35498
41042–S
5REMIC Documents (1099–INT or 1099–OID)
65498–SA
75498–ESA
2007–30 I.R.B.220July 23, 2007

Record Layout for Extension of Time (Continued)
Field
Position
Field TitleLength Description and Remarks
Note: Do not enter any other values in this field. Submit aseparate record for each document. For example, if you are
requesting an extension for Form 1099–INT and Form 5498 for the same payee, submit one record with “2” coded in this
field and another record with “3” codedin this field. If you are requesting an extension for Form 1099–DIV and Form
1099–MISC for the same payer, submit one record with “2” coded in this field.
187Foreign
Entity
Indicator
1Enter “X” if the payer is a foreign entity.
188Recipient Request Indicator1Enter “X” if the extension request is to furnish statements to the
recipients of the information return.
Note: A separate file is required for this type of extension request. A file must either contain all blanks or all X’s in this field.
189–198 Blank10Enter blanks.
199–200 Blank2Enter blanks or carriage return/line feed (CR/LF) characters.
Extension of Time Record Layout
Transmitter
Control
Code
Payer
TIN
Payer
Name
Second
Payer
Name
Payer
Address
Payer
City
Payer
State
1–56–1415–5455–9495–134135–174175–176
Payer
ZIP
Code
Document
Indicator
Foreign
Entity
Indicator
Recipient
Request
Indicator
BlankBlank
or CR/LF
177–185186187188189–198199–200
Sec. 4. Extension of Time for Recipient Copies of Information Returns
.01Request anextension of time to furnish the statements to recipientsof Forms 1098, 1099 series, 5498 series, W–2G, W–2
series, and 1042–S by submitting a letter to IRS/ECC-MTB at the address listed in Part E, Sec. 1.09. The letter should contain the
following information:
(a)Payer name
(b)TIN
(c)Address
(d)Type of return
(e)Specify that the extension request isto provide statements to recipients
(f)Reason for delay
(g)Signature of payer or duly authorized person
.02Requests for an extension of time to furnish statements to recipients of Forms 1098, 1099 series, 5498 series, W–2G, W–2
series, and 1042–S are not automatically approved; however, if approved, generallyan extension will allow aMAXIMUMof 30
additional days from the due date. The request must be postmarked by the date on which the statements are due to the recipients.
.03Generally, only the payer may sign the letter requesting the extension for recipient copies. A transmitter must have a contractual
agreement with the filers to submit extension requests on their behalf. This should be stated in your letter of request for recipient copy
extensions.
July 23, 20072212007–30 I.R.B.

.04Requests for arecipientextension of time to file for more than 50 payers arerequiredto be submitted electronically or mag-
netically. IRS encourages requests for 10 to 50 payers to be filed electronically or magnetically. (See Sec. 3, for the record layout.)
The request may be filed electronically or on tape cartridges.
.05 The fill-in Form 8809 extension option cannot be used to request an extension to furnish statements to recipients.
Sec. 5. Form 8508, Request for Waiver From Filing Information Returns
Electronically/Magnetically
.01If a payer is required to file on magnetic media but fails to do so (or fails to file electronically in lieu of magnetic media filing)
and does not have an approved waiver on record, the payer will be subject to a penalty of $50 per return in excess of 250. (For penalty
information, refer to the Penalty Section of the2007 General Instructions for Forms 1099, 1098, 5498, and W–2G.)
.02If payers are required to file original or corrected returns on magnetic media, but such filing would create an undue hardship,
they may request a waiver from these filing requirements by submitting Form 8508, Request for Waiver From Filing Information
Returns Electronically/Magnetically, to IRS/ECC-MTB. Form 8508 canbe obtained on the IRS website atw
ww.irs.govor by calling
toll-free 1–800–829–3676.
.03Even though a payer may submit as many as 249 corrections on paper, IRS encourages electronic or magnetic filing of correc-
tions. Once the 250 threshold has been met, filers are required to submit any returns of 250 or more electronically or magnetically.
However, if a waiver for original documents is approved, any corrections for the same type of returns will be covered under that
waiver.
.04Generally, only the payer may sign Form 8508. A transmitter may sign if given power of attorney; however, a letter signed by
the payer stating this fact must be attached to Form 8508.
.05A transmitter must submit a separate Form 8508 for each payer. Do not submit a list of payers.
.06All information requested on Form 8508 must beprovided to IRS for the request to be processed.
.07The waiver, if approved, will provide exemption from the electronic/magnetic media filing requirement for the current tax year
only. Payers may not apply for a waiver for more than one tax year ata time; application must be made each year a waiver is necessary.
.08Form 8508 may be photocopied or computer-generated as long as itcontains all the information requested on the original form.
.09Filers are encouraged to submit Form 8508 to IRS/ECC-MTB at least 45 days before the due date of the returns. IRS/ECC-MTB
does not process waiver requests until January. Waiver requests received prior to January are processed on a first come, first serve
basis.
.10All requests for a waiver should be sent using the following address:
IRS-Enterprise Computing Center — Martinsburg
Information Reporting Program
Attn: Extension of Time Coordinator
240 Murall Drive
Kearneysville, WV 25430
.11 File Form 8508 for the W–2 series of forms with IRS/ECC-MTB, not SSA.
.12Waivers are evaluated on a case-by-case basis and are approved ordenied based on criteria set forth in the regulations under
section 6011(e) of the Internal Revenue Code. The transmitter must allow a minimum of 30 days for IRS/ECC-MTB to respond to a
waiver request.
.13If a waiver request is approved, keep the approval letter on file.DO NOTsend a copy of the approved waiver to the service
center where the paper returns are filed.
.14An approved waiver only applies to the requirement for filing information returns electronically/magnetically. The payer must
still timely file information returns on the official IRS paper formsor an acceptable substitute form with the appropriate service center.
26 CFR 601.201: Rulings and determination letters.
Rev. Proc. 2007–52
TABLE OF CONTENTS
SECTION 1. WHAT IS THE PURPOSE OF THIS REVENUE PROCEDURE?
.............................................. 224
.01Descriptionoftermsusedinthisrevenueprocedure.............................................................. 224
.02Updatedannually............................................................................................ 225
SECTION 2. NATURE OF CHANGES AND RELATED REVENUE PROCEDURES......................................... 225
.01Rev.Proc.90–27issupersededandtheprocessingofapplicationsisnowcentralized................................ 225
2007–30 I.R.B.222July 23, 2007

.02Relatedrevenueprocedures................................................................................... 225
SECTION 3. WHAT ARE THE PROCEDURES FOR REQUESTING RECOGNITION OF EXEMPT
STATUS?
............................................................................................. 225
.01Ingeneral................................................................................................... 225
.02Userfee.................................................................................................... 225
.03Form1023application....................................................................................... 225
.04Form1024application....................................................................................... 225
.05Letterapplication............................................................................................ 225
.06Form1028application....................................................................................... 225
.07Form8871noticeforpoliticalorganizations.................................................................... 225
.08Requirementsforasubstantiallycompletedapplication .......................................................... 226
.09Terroristorganizationsnoteligibletoapplyforrecognitionofexemption........................................... 226
SECTION 4. WHAT ARE THE STANDARDS FOR ISSUING A DETERMINA
TION LETTER OR RULING
ON EXEMPT STATUS?
................................................................................. 226
.01 Exempt status must be established in application an
dsupportingdocuments ......................
.................. 226
.02 Determination letter or ruling based solely on adm
inistrativerecord..............................
.................. 226
.03 Exempt status may be recognized in advance of actua
loperations ...............................
.................. 227
.04 No letter if exempt status issue in litigation or un
derconsiderationwithintheService..............
.................. 227
.05Incompleteapplication....................................................................................... 227
.06 Even if application is complete, additional infor
mationmayberequired..........................
.................. 227
.07Expeditedhandling.......................................................................................... 227
SECTION 5. WHAT OFFICES ISSUE AN EXEMPT STATUS DETERMINATION LETTER OR RULING?.................... 228
.01EODeterminationsissuesadeterminationletterinmostcases .................................................... 228
.02CertainapplicationsreferredtoEOTechnical................................................................... 228
.03Technicaladvicemayberequestedincertaincases .............................................................. 228
.04Technicaladvicemustberequestedincertaincases.............................................................. 228
SECTION 6. WITHDRAWAL OF AN APPLICATION................................................................... 228
.01Applicationmaybewithdrawnpriortoissuanceofadeterminationletterorruling .................................. 228
.02§7428implicationsofwithdrawalofapplicationunder§501(c)(3)................................................ 228
SECTION 7. WHAT ARE THE PROCEDURES WHEN EXEMPT STATUS IS DENIED?..................................... 229
.01Proposedadversedeterminationletterorruling.................................................................. 229
.02AppealofaproposedadversedeterminationletterissuedbyEODeterminations .................................... 229
.03ProtestofaproposedadverserulingissuedbyEOTechnical...................................................... 229
.04Finaladversedeterminationletterorrulingwherenoappealorprotestissubmitted ................................. 229
.05HowEODeterminationshandlesanappealofaproposedadversedeterminationletter............................... 229
.06ConsiderationbytheAppealsOffice........................................................................... 229
.07IfaprotestofaproposedadverserulingissubmittedtoEOTechnical.............................................. 229
.08Anappealorprotestmaybewithdrawn ........................................................................ 229
.09Appealorprotestandconferencerightsnotapplicableincertainsituations ......................................... 230
SECTION 8. DISCLOSURE OF APPLICATIONS AND DETERMINATION LETTERS AND RULINGS....................... 230
.01Disclosureofapplications,supportingdocuments,andfavorabledeterminationlettersandrulings..................... 230
.02Disclosureofadversedeterminationlettersorrulings............................................................ 230
.03DisclosuretoStateofficialswhentheServicerefusestorecognizeexemptionunder§501(c)(3)....................... 230
.04DisclosuretoStateofficialsofinformationabout§501(c)(3)applicants............................................ 230
SECTION 9. REVIEW OF DETERMINATION LETTERS BY EO TECHNICAL........................................... 230
.01DeterminationlettersmaybereviewedbyEOTechnicaltoassureuniformity....................................... 230
.02ProceduresforcaseswhereEOTechnicaltakesexceptiontoadeterminationletter .................................. 231
SECTION 10. DECLARATORY JUDGMENT PROVISIONS OF § 7428................................................... 231
.01Actualcontroversyinvolvingcertainissues..................................................................... 231
.02Exhaustionofadministrativeremedies......................................................................... 231
.03Notearlierthan270daysafterseekingdetermination............................................................ 231
.04Servicemusthavereasonabletimetoactonanappealorprotest .................................................. 231
July 23, 20072232007–30 I.R.B.

.05Finaldeterminationtowhich§7428applies.................................................................... 231
SECTION 11. EFFECT OF DETERMI
NATION LETTER OR RULING RECOGNIZING EXEMPTION
.....
.................. 232
.01 Effective date of exempt
ion.................................................................
.................. 232
.02 Reliance on determinati
onletterorruling.....................................................
.................. 232
SECTION 12. REVOCATION OR MODIFICATION OF DETERMINATION LETTER OR RULING
RECOGNIZING EXEMPTION
.......................................................................... 232
.01Revocationormodificationofadeterminationletterorrulingmayberetroactive.................................... 232
.02Appealandconferenceproceduresinthecaseofrevocationormodificationofexemptstatusletter.................... 232
SECTION 13. EFFECT ON OTHER REVENUE PROCEDURES......................................................... 233
SECTION 14. EFFECTIVE DATE.................................................................................... 233
SECTION 15. PAPERWORK REDUCTION ACT....................................................................... 233
DRAFTING INFORMATION....................................................................................... 233
SECTION 1. WHAT IS THE
PURPOSE OF THIS REVENUE
PROCEDURE?
This revenue procedure sets forth proceduresfor issuing determination letters and rulings
on the exempt status of organizations under §§ 501 and 521 of the Internal Revenue Code other
than those subject to Rev. Proc. 2007–6, 2007–1 I.R.B. 189 (relating to pension, profit-shar-
ing, stock bonus, annuity, and employee stock ownership plans). Generally, the Service issues
these determination letters and rulings in response to applications for recognition of exemption
from Federal income tax. These procedures alsoapply to revocation or modification of deter-
mination letters or rulings. This revenue procedure also provides guidance on the exhaustion
of administrative remedies for purposes of declaratory judgment under § 7428 of the Code.
Description of terms used in this
revenue procedure
.01 For purposes of this revenue procedure –
(1) the term “Service” means the Internal Revenue Service.
(2) the term “application” means the appropriate form or letter that an organization must
file or submit to the Service for recognition ofexemption from Federal income tax under the
applicable section of the Internal Revenue Code. See section 3 for information on specific
forms.
(3) the term “EO Determinations” means the office of the Service that is primarily respon-
sible for processing initial applications for tax-exempt status. It includes the main EO Deter-
minations office located in Cincinnati, Ohio, and other field offices thatare under the direction
and control of the Manager, EO Determinations.
(4) the term “EO Technical” means the office of the Service that is primarily responsible for
issuing letter rulings to taxpayers on exempt organization matters, and for providing technical
advice or technical assistance to other officesof the Service on exempt organization matters.
The EO Technical office is located in Washington, DC.
(5) the term “Appeals Office” means any office under the direction and control of the Chief,
Appeals. The purpose of the Appeals Office is to resolve tax controversies, without litigation,
on a fair and impartial basis. The Appeals Office is independent of EO Determinations and EO
Technical.
(6) the term “determination letter” means a written statement issued by EO Determinations
or an Appeals Office in response to an application for recognition of exemption from Federal
income tax under §§ 501 and 521. This includesa written statement issued by EO Determina-
tions or an Appeals Office on the basis of advice secured from EO Technical pursuant to the
procedures prescribed herein and in Rev. Proc. 2007–5, 2007–1 I.R.B. 161.
(7) the term “ruling” means a written statement issued by EO Technical in response to an
application for recognition of exemption from Federal income tax under §§ 501 and 521.
2007–30 I.R.B.224July 23, 2007

Updated annually.02 This revenue procedure is updated annually, but may be modified or amplified during
the year.
SECTION 2. NATURE OF
CHANGES AND RELATED
REVENUE PROCEDURES
Rev. Proc. 90–27 is superseded
and the processing of applications
is now centralized
.01 This revenue procedure updates Rev. Proc. 90–27, 1990–1 C.B. 514, which is hereby
superseded.
(1) The responsibility for processing applications is now centralized in the EO Determina-
tions office in Cincinnati, Ohio. Key district offices no longer exist.
(2) Although applications are generally processed in the Cincinnati office, some applica-
tions may be processed in other EO Determinations offices or referred to EO Technical.
Related revenue procedures.02 This revenue procedure supplements Rev. Proc. 76–34, 1976–2 C.B. 656, with respect
to the effects of § 7428 of the Code on the classification of organizations under §§ 509(a) and
4942(j)(3). Rev. Proc. 80–27, 1980–1 C.B. 677, sets forth procedures under which exemption
may be recognized on a group basis for subordinate organizations affiliated with and under the
general supervision and control of a central organization. Rev. Proc. 72–5, 1972–1 C.B. 709,
provides information for religious and apostolic organizations seeking recognition of exemp-
tion under § 501(d). General procedures for requests for a determination letter or ruling are
provided in Rev. Proc. 2007–4, 2007–1 I.R.B. 118. User fees for requests for a determination
letter or ruling are set forth in Rev. Proc. 2007–8, 2007–1 I.R.B. 230.
SECTION 3. WHAT ARE
THE PROCEDURES FOR
REQUESTING RECOGNITION
OF EXEMPT STATUS?
In general.01 An organization seeking recognition of exempt status under § 501 or § 521 is required
to submit the appropriate application. In thecase of a numbered application form, the curr
ent
version of the form must be submitted. A central organization that has previously received
recognition of its own exemption can request a group exemption letter by submitting a lette
r
application with Form 8718,User Fee for Exempt Organization Determination Letter Reque
st.
SeeRev. Proc. 80–27.
User fee.02 An application must be submitted with the correct user fee, as set forth in Rev. Proc.
2007–8.
Form 1023 application.03 An organization seeking recognition of exemption under § 501(c)(3) and §§ 501(e), (f),
(k), (n) or (q) must submit a completed Form 1023. In the case of an organization that provides
credit counseling services, see section 501(q) of the Code.
Form 1024 application.04 An organization seeking recognition of exemption under §§ 501(c)(2), (4), (5), (6), (7),
(8), (9), (10), (12), (13), (15), (17), (19) or (25) must submit a completed Form 1024 with
Form 8718. In the case of an organization that provides credit counseling services and seeks
recognition of exemption under section 501(c)(4), see section 501(q) of the Code.
Letter application.05 An organization seeking recognition of exe
mption under §§ 501(c)(11), (14), (16), (18),
(21), (22), (23), (26), (27) or (28) or under § 50
1(d) must submit a letter application with Form
8718.
Form 1028 application.06 An organization seeking recognition of exemption under § 521 must submit a completed
Form 1028 with Form 8718.
Form 8871 notice for political
organizations
.07 A political party, a campaign committee for a candidate for federal, state or local office,
and a political action committee are all political organizations subject to tax under § 527. To be
tax-exempt, a political organization may be required to notify the Service that it is to be treated
July 23, 20072252007–30 I.R.B.

as a § 527 organization by electronically filing Form 8871,Political Organization Notice of
Section 527 Status. For details, go to the IRS website atwww.irs.gov/polorgs.
Requirements for a substanti
ally
completed application
.08 A substantially complete
d application, including a letter application, is one that:
(1) is signed by an authorized individual.
(2) includes an Employer Identification Number (EIN).
(3) includes a statement of receipts and expenditures and a balance sheet for the current
year and the three preceding years (or the years the organization was in existence, if less than
four years). If the organization has not yet commenced operations, or has not completed one
accounting period, a substantially completed application generally includes a proposed budget
for two full accounting periods and a current statement of assets and liabilities.
(4) includes a detailed narrative statement of proposed activities, including each of the
fundraising activities of a § 501(c)(3) organization, and a narrative description of anticipated
receipts and contemplated expenditures.
(5) includes a copy of the organizing or enabling document that is signed by a principal
officer or is accompanied by a written declaration signed by an authorized individual certify-
ing that the document is a complete and accuratecopy of the original or otherwise meets the
requirements of a “conformed copy” as outlined in Rev. Proc. 68–14, 1968–1 C.B. 768.
(6) if the organizing or enabling document is in the form of articles of incorporation, includes
evidence that it was filed with and approved by an appropriate state official (e.g.,stamped
“Filed” and dated by the Secretary of State). Alternatively, a copy of the articles of incor-
poration may be submitted if accompanied by awritten declaration signed by an authorized
individual that the copy is a complete and accurate copy of the original copy that was filed
with and approved by the state. If a copy is submitted, the written declaration must include the
date the articles were filed with the state.
(7) if the organization has adopted by-laws, includes a current copy. The by-laws need
not be signed if submitted as an attachment to the application for recognition of exemption.
Otherwise, the by-laws must be verifiedas current by an authorized individual.
(8) is accompanied by the correct userfee and Form 8718, when applicable.
Terrorist organizations not
eligible to apply for recognition of
exemption
.09 An organization that is identified or designated as a terrorist organization within the
meaning of section 501(p)(2) of the Code is not eligible to apply for recognition of exemption.
SECTION 4. WHAT ARE THE
STANDARDS FOR ISSUING A
DETERMINATION LETTER
OR RULING ON EXEMPT
STATUS?
Exempt status must be established
in application and supporting
documents
.01 A favorable determination letter or ruling will be issued to an organization only if its
application and supporting documents establishthat it meets the particular requirements of the
section under which exemption from Federal income tax is claimed.
Determination letter or ruling
basedsolelyonadministrative
record
.02 A determination letter or ruling on exempt status is issued based solely upon the facts
and representationscontained in the administrative record.
(1) The applicant is responsible for the accuracy of any factual representations contained in
the application.
(2) Any oral representation of additional facts or modification of facts as represented or
alleged in the application must be reduced to writing over the signature of an authorized indi-
vidual.
2007–30 I.R.B.226July 23, 2007

(3) The failure to disclose a material fact or misrepresentation of a material fact on the ap-
plication may adversely affect the reliance that would otherwise be obtained through issuance
by the Service of a favorable determination letter or ruling.
Exempt status may be recognized
in advance of actual operations
.03 Exempt status may be recognized in advance of the organization’s operations if the pro-
posed activities are described in sufficient detail to permit a conclusion that the organization
will clearly meet the particular requirements for exemption pursuant to the section of the In-
ternal Revenue Code under which exemption is claimed.
(1) A mere restatement of exempt purposes or astatement that proposed activities will be
in furtherance of such purposes will not satisfy this requirement.
(2) The organization must fully describe all of the activities in which it expects to engage,
including the standards, criteria, proceduresor other means adopted or planned for carrying out
the activities, the anticipatedsources of receipts, and the natureof contemplated expenditures.
(3) Where the organization cannot demonstrate to the satisfaction of the Service that it quali-
fies for exemption pursuant to the section of theInternal Revenue Code under which exemption
is claimed, the Service will generally issue a proposed adverse determination letter or ruling.
See alsosection 7.
No letter if exempt status issue in
litigation or under consideration
within the Service
.04 A determination letter or ruling on exempt status will not ordinarily be issued if an issue
involving the organization’s exempt statusunder § 501 or § 521 is pending in litigation, is
under consideration within the Service, or if issuance of a determination letter or ruling is not
in the interest of sound tax administration. If the Service declines to issue a determination
or ruling to an organization seeking exempt status under § 501(c)(3), the organization may
pursue a declaratory judgment under § 7428 provided that it has exhausted its administrative
remedies.
Incomplete application.05 If an application does not contain al
l of the items set out in section 3.08, the Service may
return it to the applicant for completi
on.
(1) In lieu of returning an incomplete application, the Service may retain the application and
request additional information needed for asubstantially completed application.
(2) In the case of an application or a group exemption request under § 501(c)(3) that is
returned incomplete, the 270-day period referred to in § 7428(b)(2) will not be considered
as starting until the date a substantially completed Form 1023 or group exemption request is
refiled with or remailed to the Service. If the application or group exemption request is mailed
to the Service and a postmark is not evident, the 270-day period will start to run on the date the
Service actually receives the substantially completed Form 1023 or group exemption request.
The same rules apply for purposes of the notice requirement of § 508.
(3) Generally, the user fee will not be refunded if an incomplete application is filed.See
Rev. Proc. 2007–8, section 10.
Even if application is complete,
additional information may
be required
.06 Even though an application is substantially complete, the Service may request additional
information before issuing a determination letter or ruling.
(1) If the application involves anissue where contrary authorities exist, an applicant’s failure
to disclose and distinguish contrary authorities may result in requests for additional informa-
tion, which could delay final action on the application.
(2) In the case of an application under § 501(c)(3), the period of time beginning on the date
the Service requests additional information until the date the information is submitted to the
Service will not be counted for purposes of the 270-day period referred to in § 7428(b)(2).
Expedited handling.07 Applications are normally processed in the order of receipt by the Service. However,
expedited handling of an application may be approved where a request is made in writing and
contains a compelling reason for processing the application ahead of others. Upon approval
of a request for expedited handling, an application will be considered out of its normal order.
July 23, 20072272007–30 I.R.B.

This does not mean the application will be immediately approved or denied. Circumstances
generally warranting expedited processing include:
(1) A grant to the applicant is pending and thefailure to secure the grant may have an adverse
impact on the organization’s ability to continue to operate.
(2) The purpose of the newly created organization is to provide disaster relief to victims of
emergencies such as flood and hurricane.
(3) There have been undue delays in issuing a determination letter or ruling caused by a
Service error.
SECTION 5. WHAT OFFICES
ISSUEANEXEMPTSTATUS
DETERMINATION LETTER
OR RULING?
EO Determinations issues a
determination letter in most cases
.01 Under the general procedures outlinedin Rev. Proc. 2007–4, EO Determinations is
authorized to issue determination letters on applications for exempt status under §§ 501 and
521.
Certain applications referred to
EO Technical
.02 EO Determinations will refer to EO Technical those applications that present issues
which are not specifically covered by statute or regulations, or by a ruling, opinion, or court
decision published in the Internal Revenue Bulletin. In addition, EO Determinations will refer
those applications that have been specifically reserved by revenue procedure or by other official
Service instructions for handling by EO Technical for purposes of establishing uniformity or
centralized control of designated categories of cases. EO Technical will notify the applicant
organization upon receipt of a referred application, and will consider each such application and
issue a ruling directly to the organization.
Technical advice may be
requested in certain cases
.03 If at any time during the course of consideration of an exemption application by EO
Determinations the organization believes that its case involves an issue on which there is
no
published precedent, or there has been non-uniformity in theService’s handling of simila
r
cases, the organization may request that EO Determinations either refer the application t
oEO
Technical or seek technicaladvice from EO Technical.SeeRev. Proc. 2007–5, section 4.04.
Technical advice must be
requested in certain cases
.04 If EO Determinations proposes to recognize the exemption of an organization to which
EO Technical had issued a previous contrary ruling or technical advice, EO Determinations
must seek technical advice from EO Technical before issuing a determination letter. This does
not apply where EO Technical issued an adverse ruling and the organization subsequently made
changes to its purposes, activities, or operations to remove the basis for which exempt status
was denied.
SECTION 6. WITHDRAWAL OF
AN APPLICATION
Application may be withdrawn
prior to issuance of a
determination letter or ruling
.01Anapplicationmaybewithdrawnuponthewritten request of an authorized individual
atanytimepriortotheissuanceofadetermination letter or ruling. Therefore, an application
may not be withdrawn after the issuance of a proposed adverse determination letter or ruling.
(1) When an application is withdrawn, the Servic
e will retain the application and all sup-
porting documents. The Service may consider th
e information submitted in connection with
the withdrawn request in a subsequent examinat
ion of the organization.
(2) Generally, the user fee will not be refunded if an application is withdrawn.SeeRev.
Proc. 2007–8, section 10.
§ 7428 implications of withdrawal
of application under § 501(c)(3)
.02 The Service will not consider the withdrawal of an application under § 501(c)(3) as
either a failure to make a determination withinthe meaning of § 7428(a)(2) or as an exhaustion
of administrative remedies within the meaning of § 7428(b)(2).
2007–30 I.R.B.228July 23, 2007

SECTION 7. WHAT ARE
THE PROCEDURES WHEN
EXEMPT STATUS IS DENIED?
Proposed adverse determination
letter or ruling
.01 If EO Determinations or EO Technical reaches the conclusion that the organization does
not satisfy the requirements for exempt statuspursuant to the section of the Internal Revenue
Code under which exemption is claimed, the Service will generally issue a proposed adverse
determination letter or ruling, which will:
(1) Include a detailed discussion of the Service’s rationale for the denial of tax-exempt sta-
tus.
(2) Advise the organization of its opportunity to appeal or protest the decision and request
a conference.
Appeal of a proposed adverse
determination letter issued by
EO Determinations
.02 A proposed adverse determination letterissued by EO Determinations will advise the
organization of its opportunity to appeal the determination by requesting Appeals Office con-
sideration. To do this, the organization must submit a statement of the facts, law and arguments
in support of its position within 30 days from the date of the adverse determination letter. The
organization must also state whether it wishes an Appeals Office conference. Any determina-
tion letter issued on the basis of technical advice from EO Technical may not be appealed to
the Appeals Office on issues that were the subject of the technical advice.
Protest of a proposed adverse
ruling issued by EO Technical
.03 A proposed adverse ruling issued by EO Technical will advise the organization of its
opportunity to file a protest statement within 30 days and to request a conference. If a con-
ference is requested, the conference procedures outlined in Rev. Proc. 2007–4, section 12, are
applicable.
Final adverse determination letter
or ruling where no appeal or
protest is submitted
.04 If an organization does not submit a timely appeal of a proposed adverse determination
letter issued by EO Determinations, or a timely protest of a proposed adverse ruling issued by
EO Technical, a final adverse determination letter or ruling will be issued to the organization.
The final adverse letter or ruling will provideinformation about the filing of tax returns and
the disclosure of the proposed and final adverse letters or rulings.
How EO Determinations handles
an appeal of a proposed adverse
determination letter
.05 If an organization submits an appeal of the proposed adverse determination letter, EO
Determinations will first review the appeal, and if it determines that the organization qualifies
for tax-exempt status issue a favorable exempt status determination letter. If EO Determina-
tions maintains its adverse position after reviewing the appeal, it will forward the appeal and
the exemption application case file to the Appeals Office.
Consideration by the Appeals
Office
.06 The Appeals Office will consider the organization’s appeal. If the Appeals Office agrees
with the proposed adverse determination, it will either issue a final adverse determination or,
if a conference was requested, contact the organization to schedule aconference. At the end
of the conference process, which may involve the submission of additional information, the
Appeals Office will either issue a final adversedetermination letter or a favorable determina-
tion letter. If the Appeals Office believes that an exemption or private foundation status issue is
not covered by published precedent or that thereis non-uniformity, the Appeals Office must re-
quest technical advice from EO Technical in accordance with Rev. Proc. 2007–5, section 4.04.
If a protest of a proposed adverse
ruling is submitted to EO
Technical
.07 If an organization submits a protest of a proposed adverse exempt status ruling, EO
Technical will review the protest statement.If the protest convinces EO Technical that the
organization qualifies for tax-exempt status, afavorable ruling will be issued. If EO Technical
maintains its adverse position after reviewing the protest, it will either issue a final adverse
ruling or, if a conference was requested, contact the organization to schedule a conference. At
the end of the conference process, which may involve the submission of additional information,
EO Technical will either issue a final adverse ruling or a favorable exempt status ruling.
An appeal or protest may be
withdrawn
.08 An organization may withdraw its appealor protest before the Service issues a final
adverse determination letter or ruling. Upon receipt of the withdrawal request, the Service will
complete the processing of the case in the same manner as if no appeal or protest was received.
July 23, 20072292007–30 I.R.B.

Appeal or protest and conference
rights not applicable in certain
situations
.09 The opportunity to appeal or protest a proposed adverse determination letter or ruling
and the conference rights described above are not applicable to matters where delay would be
prejudicial to the interests of the Service (such as in cases involving fraud, jeopardy, the immi-
nence of the expiration of the statute of limitations, or where immediate action is necessary to
protect the interestsof the Government).
SECTION 8. DISCLOSURE
OF APPLICATIONS AND
DETERMINATION LETTERS
AND RULINGS
§§ 6104 and 6110 of the Code provide rules for the disclosure of applications, including
supporting documents, and determination letters and rulings.
Disclosure of applications,
supporting documents, and
favorable determination letters
or rulings
.01 The applications, any supporting documents, and the favorable determination letter or
ruling issued are available for public inspection under § 6104(a)(1) of the Code. However,
there are certain limited disclosure exceptions for a trade secret, patent, process, style of work,
or apparatus if the Service determines that the disclosure of the information would adversely
affect the organization.
(1) The Service is required to make the applications, supporting documents, and favorable
determination letters or rulings available upon request. The public can request this information
by submitting Form 4506–A,Request for Public Inspection or Copy of Exempt or Political
Organization IRS Form.
(2) The exempt organization is required to make its exemption application, supporting doc-
uments, and determination letter or ruling available for public inspection without charge. For
more information about the exempt organization’s disclosure obligations,seePublication 557,
Tax-Exempt Status for Your Organization.
Disclosure of adverse
determination letters or rulings
.02 The Service is required to make adverse determination letters and rulings available for
public inspection under § 6110 of the Code. Uponissuance of the final adverse determination
letter or ruling to an organization, both the proposed adverse determination letter or ruling and
the final adverse determination letter or ruling will be released under § 6110.
(1) These documents are made available to the public after the deletion of names, addresses,
and any other information that might identify the taxpayer. See § 6110(c) for other specific
disclosure exemptions.
(2) The final adverse determination letter or ruling will enclose Notice 437,Notice of Inten-
tion to Disclose, and redacted copies of the final and proposed adverse determination letters
or rulings. Notice 437 provides instructions ifthe organization disagrees with the deletions
proposed by the Service.
Disclosure to State officials when
the Service refuses to recognize
exemption under § 501(c)(3)
.03 The Service may notify the appropriate State officials of a refusal to recognize an or-
ganization as tax-exempt under § 501(c)(3).See§ 6104(c) of the Code. The notice to the State
officials may include a copy of a proposed or final adverse determination letter or ruling the
Service issued to the organization. In addition, upon request by the appropriate State official,
the Service may make available for inspection and copying the exemption application and other
information relating to the Service’s determination on exempt status.
Disclosure to State officials of
information about § 501(c)(3)
applicants
.04 The Service may disclose to State officialsthe name, address, and identification number
of any organization that has applied for recognition of exemption under § 501(c)(3).
SECTION 9. REVIEW OF
DETERMINATION LETTERS
BY EO TECHNICAL
Determination letters may be
reviewed by EO Technical to
assure uniformity
.01 Determination letters issued by EO Determinations may be reviewed by EO Technical,
ortheOfficeoftheAssociateChiefCounsel(Passthroughs and Special Industries) (for cases
under § 521), to assure uniform application of the statutes or regulations, or rulings, court
opinions, or decisions published in the Internal Revenue Bulletin.
2007–30 I.R.B.230July 23, 2007

Procedures for cases where EO
Technical takes exception to a
determination letter
.02 If EO Technical takes exception to a determination letter issued by EO Determinations,
the manager of EO Determinations will be advised. If EO Determinations notifies the organ-
ization of the exception taken, and the organization disagrees with the exception, the file will
be returned to EO Technical. The referral to EOTechnical will be treated as a request for tech-
nical advice and the procedures in Rev. Proc. 2007–5 will be followed.
SECTION 10. DECLARATORY
JUDGMENT PROVISIONS
OF § 7428
Actual controversy involving
certain issues
.01 Generally, a declaratory judgment proceeding under § 7428 of the Code can be filed in
the United States Tax Court, the United States Court of Federal Claims, or the district court of
the United States for the District of Columbia with respect to an actual controversy involving
a determination by the Service or a failure of theService to make a determination with respect
to the initial or continuing qualification or classification of an organization under § 501(c)(3)
(charitable, educational, etc.); § 170(c)(2) (deductibility of contributions); § 509(a) (private
foundation status); or § 4942(j)(3)(operating foundation status).
Exhaustion of administrative
remedies
.02 Before filing a declaratory judgment action, an organization must exhaust its adminis-
trative remedies by taking, in a timely manner,all reasonable steps to secure a determination
from the Service. These include:
(1) the filing of a substantially completed application Form 1023 or group exemption re-
quest under § 501(c)(3) pursuant to section 3.08 of this Revenue Procedure or the request for
a determination of foundation status pursuant to Rev. Proc. 76–34;
(2) in appropriate cases, requesting relief pursuant to § 301.9100–1 of the Procedure and
Administration Regulations regarding the extension of time for making an election or applica-
tion for relief from tax (seeRev. Proc. 92–85, 1992–2 C.B. 490);
(3) the timely submission of all additional information requested by the Service to perfect
an exemption application or request for determination of private foundation status; and
(4) exhaustion of all administrative appeals available within the Service pursuant to
section 7.
Not earlier than 270 days after
seeking determination
.03 An organization will in no event be deemed to have exhausted its administrative reme-
dies prior to the earlier of:
(1) the completion of the steps in section 10.02, and the sending by the Service by certified
or registered mail of a final determination letter or ruling; or
(2) the expiration of the 270-day period described in § 7428(b)(2) in a case where the Service
has not issued a final determination letter or ruling and the organization has taken, in a timely
manner, all reasonable steps to secure a determination letter or ruling.
Service must have reasonable time
to act on an appeal or protest
.04 The steps described in section 10.02 willnot be considered completed until the Service
has had a reasonable time to act upon an appeal or protest as the case may be.
Final determination to which
§ 7428 applies
.05 A final determination to which § 7428 of theCode applies is a determination letter or
ruling, sent by certified or registered mail, which holds that the organization is not described in
§ 501(c)(3) or § 170(c)(2), is a public charity described in a part of § 509 or § 170(b)(1)(A) other
than the part under which the organization requested classification, is not a private foundation
as defined in § 4942(j)(3), or is a private foundation and not a public charity described in a part
of § 509 or § 170(b)(1)(A).
July 23, 20072312007–30 I.R.B.

SECTION 11. EFFECT OF
DETERMINATION LETTER
OR RULING RECOGNIZING
EXEMPTION
Effective date of exemption.01 A determination letter or ruling recognizing exemption is usually effective as of the date
of formation of an organization if its purposesand activities prior to the date of the determi-
nation letter or ruling were consistent with the requirements for exemption. However, special
rules under § 508(a) of the Code may apply to an organization applying for exemption under
§ 501(c)(3), and special rules under § 505(c) may apply to an organization applying for ex-
emption under §§ 501(c)(9), (17), or (20).
(1) If the Service requires the organization to alter its activities or make substantive amend-
ments to its enabling instrument, the exemption will be effective as of the date specified in a
determination letter or ruling.
(2) If the Service requires the organization to make a nonsubstantive amendment, exemp-
tion will ordinarily be recognized as of the date of formation. Examples of nonsubstantive
amendments include correction of a clerical error in the enabling instrument or the addition of
a dissolution clause where the activities of the organization prior to the determination letter or
ruling are consistent with the requirements for exemption.
Reliance on determination
letter or ruling
.02 A determination letter or ruling recognizing exemption may not be relied upon if there
is a material change, inconsistent with exemption, in the character, the purpose, or the method
of operation of the organization. Also, a determination letter or ruling may not be relied upon
if it was based on any inaccurate material factual representations.Seesection 12.01.
SECTION 12. REVOCATION
OR MODIFICATION OF
DETERMINATION LETTER
OR RULING RECOGNIZING
EXEMPTION
A determination letter or ruling recognizing exemption may be revoked or modified by (1)
a notice to the taxpayer to whom the determination letter or ruling was issued, (2) enactment of
legislation or ratification of a tax treaty, (3) a decision of the United States Supreme Court, (4)
the issuance of temporary or final regulations, or (5) the issuance of a revenue ruling, revenue
procedure, or other statement published in the Internal Revenue Bulletin.
Revocation or modification of a
determination letter or ruling
may be retroactive
.01 The revocation or modification of a determination letter or ruling recognizing exemption
may be retroactive if the organizationomittedormisstatedamaterialfact,operatedinamanner
materially different from that originally represented, or, in the case of organizations to which
§ 503 of the Code applies, engaged in a prohibited transaction with the purpose of diverting
corpus or income of the organization from its exempt purpose and such transaction involved a
substantial part of the corpus or income of suchorganization. In certain cases an organization
may seek relief from retroactive revocation or modification of a determination letter or ruling
under § 7805(b). Requests for § 7805(b) relief are subject to the procedures set forth in Rev.
Proc. 2007–5.
(1) Where there is a material change, inconsistent with exemption, in the character, the pur-
pose, or the method of operation of an organization, revocation or modification will ordinarily
take effect as of the date of such material change.
(2) In the case where a determination letter or ruling is issued in error or is no longer in
accord with the Service’s position and § 7805(b) relief is granted (seesections 13 and 14 of
Rev. Proc. 2007–4), ordinarily, the revocation or modification will be effective not earlier than
the date when the Service modifies or revokesthe original determination letter or ruling.
Appeal and conference
procedures in the case of
revocation or modification of
exempt status letter
.02 In the case of a revocation or modification of a determination letter or ruling, the appeal
and conference procedures are generally the same as set out in section 7 of these procedures,
including the right of the organization to request that EO Determinations or the Appeals Office
seek technical advice from EO Technical. However, appeal and conference rights are not ap-
plicable to matters where delay would be prejudicial to the interests of the Service (such as in
cases involving fraud, jeopardy, the imminence of the expiration of the statute of limitations,
or where immediate action is necessary to protect the interests of the Government).
2007–30 I.R.B.232July 23, 2007

(1) If the case involves an exempt status issue on which EO Technical had issued a previous
contrary ruling or technical advice, EO Determinations generally must seek technical advice
from EO Technical.
(2) EO Determinations does not have to seek technical advice if the prior ruling or technical
advice has been revoked by subsequent contrary published precedent or if the proposed revo-
cation involves a subordinate unit of an organization that holds a group exemption letter issued
by EO Technical, the EO Technical ruling or technical advice was issued under the Internal
Revenue Code of 1939 or prior revenue acts, or if the ruling was issued in response to Form
4653,Notification Concerning Foundation Status.
SECTION 13. EFFECT
ON OTHER REVENUE
PROCEDURES
Rev. Proc. 90–27 is superseded.
SECTION 14. EFFECTIVE
DATE
This revenue procedure is effective July 23, 2007.
SECTION 15. PAPERWORK
REDUCTION ACT
The collection of information for a letter application under section 3.05 of this revenue pro-
cedure has been reviewed and approved by the Office of Management and Budget (OMB)
in accordance with the Paperwork Reduction Act (44 U.S.C. § 3507) under control number
1545–2080. All other collections of information under this revenue procedure have been ap-
proved under separate OMB control numbers.
An agency may not conduct or sponsor, and a person is not required to respond to, a collec-
tion of information unless the collection of information displays a valid OMB control number.
The collection of this information is required if an organization wants to be recognized as
tax-exempt by the Service. We need the information to determine whether the organization
meets the legal requirements for tax-exempt status. In addition, this information will be used
to help the Service delete certain information from the text of an adverse determination letter
or ruling before it is made available for public inspection, as required by § 6110.
The time needed to complete and file a letter application will vary depending on individual
circumstances. The estimated average time is 10 hours.
Books and records relating to the collection of information must be retained as long as their
contents may become material in the administration of any internal revenue law. The rules
governing the confidentiality of letter applications are covered in § 6104.
DRAFTING INFORMATIONThe principal author of this revenue procedure is Wayne Hardesty of the Exempt Organiza-
tions, Tax Exempt and Government Entities Division. For further information regarding this
revenue procedure, please contact the TE/GE Customer Service office at (877) 829–5500 (a
toll-free call).
26 CFR 601.204: Changes in accounting periods and
methods of accounting.
(Also Part I, §§ 61, 451, 471, 481; 1.451–1.)
Rev. Proc. 2007–53
SECTION 1. PURPOSE
In general, the Internal Revenue Ser-
vice will followWestpac Pacific Food
v. Commissioner, 451 F.3d 970 (9
th
Cir.
2006), with respect to taxpayers that adopt
the Advance Trade Discount Method of
accounting described in section 4 of this
revenue procedure. Accordingly, this rev-
enue procedure permits accrual method
taxpayersdescribedinsection3ofthis
revenue procedure to account for advance
trade discounts under the Advance Trade
Discount Method. This revenue procedure
also provides procedures to obtain the
automatic consent of the Commissioner
to change to the Advance Trade Discount
Method.
SECTION 2. BACKGROUND
InWestpac, an accrual method taxpayer
received payments, referred to as “advance
trade discounts,” upon entering into con-
tracts with sellers of merchandise. Under
the contracts, the taxpayer was required to
purchase a minimum amount of merchan-
dise during the term of a contract and was
obligated to refund apro rataportion of
the cash payment to the extent the purchase
commitment was not satisfied. InWestpac,
the court held that the advance trade dis-
count was not recognized as gross income
under § 61 by the taxpayer when received.
July 23, 20072332007–30 I.R.B.

SECTION 3. SCOPE
This revenue procedure applies to an
accrual method taxpayer required to use
an inventory method of accounting and
maintaining inventories, as provided for in
§ 471 of the Internal Revenue Code and the
regulations thereunder, that receives ad-
vance trade discounts (as defined in sec-
tion 4.03 of this revenue procedure).
SECTION 4. ADVANCE TRADE
DISCOUNT METHOD
.01In General. A taxpayer within the
scope of this revenue procedure is permit-
ted to use the Advance Trade Discount
Method of accounting. Under the Ad-
vance Trade Discount Method, an advance
trade discount (as defined in section 4.03
of this revenue procedure) is not recog-
nized as gross income under § 61 upon re-
ceipt. The advance trade discount gener-
ally is taken into account for federal in-
come tax purposes in the amount of, in
the manner of, and for the taxable year in
which the taxpayer accounts for the dis-
count in its applicable financial statements
(as defined in section 4.06 of this revenue
procedure). Thus, if a taxpayer reports an
advance trade discount related to specific
items of inventory in its applicable finan-
cial statements as a reduction to the cost of
that inventory, the taxpayer must treat the
discount as a trade or other discount un-
der § 471 and reduce only the cost of the
inventory to which the discount relates in
the amount of, in the same manner as, and
for the taxable year in which it reduces the
cost of that inventory in its applicable fi-
nancial statements. The taxpayer may not,
for example, unwind the allocation made
in its applicable financial statements and
instead allocate the discount using the sim-
plified resale method.Alternatively, if a
taxpayer allocates an advance trade dis-
count in its applicable financial statements
exclusively to cost of goods sold, the tax-
payer must treat the discount as a reduction
to the cost of goods sold in the amount of
and for the taxable year in which the dis-
count is allocated tocost of goods sold in
its applicable financial statements. How-
ever, a taxpayer must reduce the cost of
the inventory to which the discount relates
as the taxpayer purchases the inventory if
that treatment results in the advance trade
discount being recognized for federal in-
come tax purposes earlier than when the
taxpayer accounts for the discount in its
applicable financial statements.
.02Taxpayers Without Applicable Fi-
nancial Statements. To use the Advance
Trade Discount Method, a taxpayer within
the scope of this revenue procedure that
does not have applicable financial state-
ments (as defined in section 4.06 of this
revenue procedure) must reduce only the
cost of the specific items of inventory to
which the discount relates as the taxpayer
purchases the inventory.
.03Advance Trade Discounts.Apay-
ment received by a taxpayer is an advance
trade discount if:
(1) The payment is received from a
seller of merchandise in exchange for a
commitment by the taxpayer to purchase a
minimum amount of merchandise from the
seller within a period that does not exceed
5 years from the date of the agreement;
(2) Except as provided for in section
4.04 of this revenue procedure, the pay-
ment is intended to be a discount to the
priceofthemerchandisetobepurchased;
(3) The taxpayer is obligated, either in
writing or because of industry custom, to
repay an allocable portion, or all, of the
payment if the underlying purchase com-
mitment is not met; and
(4) The taxpayer does not treat the pay-
ment as a payment for services in its ap-
plicable financial statements (as defined in
section 4.06 of this revenue procedure), if
any.
.04Exclusive Supplier Agreements and
Shelving Allowances. Solely for purposes
of the Advance Trade Discount Method,
amounts allocable to exclusive supplier
agreements and shelving (slotting) al-
lowances included as part of a purchase
commitment described in section 4.03(1)
of this revenue procedure will be treated as
advance trade discounts if the taxpayer is
obligated to repay an allocable portion of
those amounts if the underlying purchase
commitment is not met and the require-
ments in sections 4.03(3) and (4) of this
revenue procedure are satisfied.
.05Allocable Payments.Except as pro-
vided for in section 4.04 of this revenue
procedure, a taxpayer that receives a pay-
ment that is partially attributable to an ad-
vance trade discount described in section
4.03 of this revenue procedure may use
the Advance Trade Discount Method only
with respect to the portion of the payment
that is allocable to the advance trade dis-
count based on objective criteria. For ex-
ample, if the taxpayer receives a payment,
part of which is for an advance trade dis-
count and for part of which the taxpayer is
obligated to perform or provide coopera-
tive advertising services, the taxpayer may
use the Advance Trade Discount Method
only for the portion of the payment that the
taxpayer is able to demonstrate, based on
objective criteria, is attributable to the ad-
vance trade discount.
.06Applicable Financial Statement.
The taxpayer’s applicable financial state-
ment is the taxpayer’s financial statement
listed in paragraphs (1) through (3) of
this section 4.06 that has the highest pri-
ority (including within paragraph (2)).
A taxpayer that does not have a finan-
cial statement described in paragraphs (1)
through (3) of this section 4.06 does not
have an applicable financial statement for
purposes of this revenue procedure. The
financial statements are, in descending
priority —
(1) a financial statement required to
be filed with the Securities and Exchange
Commission (“SEC”) (the 10-K or the
Annual Statement to Shareholders);
(2) a certified audited financial state-
ment that is accompanied by the report of
an independent CPA (or in the case of a
foreign corporation, by the report of a sim-
ilarly qualified independent professional),
that is used for –
(a) credit purposes,
(b) reporting to shareholders, or
(c) any other substantial non-tax pur-
pose; or
(3) a financial statement (other than a
tax return) required to be provided to the
federal or a state government or any fed-
eral or state agency (other than the SEC or
the Internal Revenue Service).
SECTION 5. AUDIT PROTECTION
FOR TAXPAYERS CURRENTLY
USING THE ADVANCE TRADE
DISCOUNT METHOD
A taxpayer’s use of the Advance Trade
Discount Method provided for in section 4
of this revenue procedure on a federal in-
cometaxreturnfiledbeforeJuly2,2007,
will not be raised as an issue by the Ser-
vice. Moreover, if a taxpayer’s use of the
Advance Trade Discount Method on a fed-
eral income tax return filed before July 2,
2007–30 I.R.B.234July 23, 2007

2007, is an issue under consideration in
examination, appeals, or before the Tax
Court, the issue will not be further pursued
by the Service.
SECTION 6. CHANGE IN
ACCOUNTING METHOD
.01In General. A change in a tax-
payer’s method of accounting for advance
trade discounts to the Advance Trade Dis-
count Method provided for in section 4
of this revenue procedure is a change in
method of accounting to which the provi-
sions of §§ 446 and 481 and the regula-
tions thereunder apply. Therefore, a tax-
payer within the scope of this revenue pro-
cedure that wants to change to the Advance
Trade Discount Method for taxable years
ending on or after July 2, 2007, must ob-
tain the consent of the Commissioner un-
der § 446(e) and § 1.446–1(e)(3).
.02Automatic Change.A taxpayer
within the scope of this revenue procedure
that wants to change to the Advance Trade
Discount Method must obtain the consent
of the Commissioner by following the
automatic change in method of account-
ing procedures in Rev. Proc. 2002–9,
2002–1 C.B. 327 (as modified and clari-
fied by Announcement 2002–17, 2002–1
C.B. 561, modified and amplified by Rev.
Proc. 2002–19, 2002–1 C.B. 696, and
amplified, clarified, and modified by Rev.
Proc. 2002–54, 2002–2 C.B. 432) (or its
successor), with the following additional
modifications: (1) the scope limitations
in section 4.02 of Rev. Proc. 2002–9 do
not apply to a taxpayer that wants to make
the change for its first taxable year ending
on or after July 2, 2007; and (2) for pur-
poses of section 6.02(4)(a) of Rev. Proc.
2002–9, the taxpayer must include on Line
1a of the Form 3115 the designated auto-
matic accounting method change number
“111.”
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2002–9 is modified and
amplified to include in the APPENDIX the
automatic change provided in this revenue
procedure.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Norma Rotunno of the Office
of Associate Chief Counsel (Income Tax
& Accounting). For further information
regarding this revenue procedure, contact
Grant D. Anderson at (202) 622–4930 (not
a toll-free number).
July 23, 20072352007–30 I.R.B.

Part IV. Items of General Interest
Elimination of Schedule P of
Form 5500 Series
Announcement 2007–63
On July 21, 2006, the Department of
Labor announced rules mandating elec-
tronic filings of the Form 5500,Annual
Return/ReportofEmployeeBenefitPlan,
under Title I of the Employee Retirement
Income Security Act of 1974 (ERISA),
71Fed. Reg.41359 (Jul. 21, 2006). To
reduce administrative burdens of employ-
ers, plans, their administrators and trustees
and custodians, and in anticipation of the
transition to a wholly electronic filing
environment under the ERISA Filing Ac-
ceptance System (EFAST), the Service
has determined that the continued use of
a Schedule P,Annual Return of Fiduciary
of Employee Benefit Trust, in connection
with the filing of a plan’s Form 5500 is no
longer necessary for theefficient adminis-
tration of the Internal Revenue laws.
Pursuant to the authority contained in
§ 6033(a) of the Internal Revenue Code,
the Schedule P, which may be completed
by a trustee of an employee benefit trust
as the annual return of that trust, is being
eliminated. The elimination of Schedule
P is effective for the 2005 and later plan
years for Form 5500–EZ filers. For all
other Form 5500 series filers, the elimina-
tion of Schedule P is effective for the 2006
and later plan years.
For plan years in which the Schedule
P is eliminated, the Service will treat the
plan’s filing of a return from the applica-
ble Form 5500 series as if the filing consti-
tutes a return of the plan’s employee bene-
fit trust for purposes of § 6501(g)(2). Thus,
the Service will not assess income taxes
with respect to an employee benefit trust
later than the limitations periods specified
in section 6501 for the assessment of tax
related to the Form 5500 filed by the plan
to which the trust relates. Notwithstand-
ing the preceding sentence, in any case in
which the plan has been a party to an abu-
sive tax avoidance transaction, as defined
in section 4.13(2) of Rev. Proc. 2006–27,
2006–1 C.B. 945, or any successor thereto,
the period during which the Service may
assess income taxes with respect to the
plan’s employee benefit trust shall expire
6 years from the date the plan administra-
tor or employer files a complete and accu-
rate Form 5500 series (including all related
schedules).
Drafting Information
The principal authors of this announce-
ment are Michael Rubin of the Employee
Plans, Tax Exempt and Government En-
tities Division, and William D. Gibbs
andDanaA.BarryoftheOfficeofthe
Division Counsel/Associate Chief Coun-
sel (Tax Exempt and Government En-
tities). For further information regard-
ing this announcement, please contact
the Employee Plans taxpayer assistance
answering service at 1–877–829–5500
(a toll-free call) between the hours of
8:30 a.m. and 4:30 p.m. Eastern time
Monday through Friday or Mr. Rubin
atRetirementPlanQuestions@irs.gov.
Mr. Gibbs and Ms. Barry can be reached
at 202–622–6060 (not a toll-free call).
Deletions From Cumulative
List of Organizations
Contributions to Which
are Deductible Under Section
170 of the Code
Announcement 2007–65
The names of organizations that no
longer qualify as organizations described
in section 170(c)(2) of the Internal Rev-
enue Code of 1986 are listed below.
Generally, the Service will not disallow
deductions for contributions made to a
listed organization on or before the date
of announcement in the Internal Revenue
Bulletinthatanorganizationnolonger
qualifies. However, the Service is not
precluded from disallowing a deduction
for any contributions made after an or-
ganization ceases to qualify under section
170(c)(2) if the organization has not timely
filed a suit for declaratory judgment under
section 7428 and if the contributor (1) had
knowledge of the revocation of the ruling
or determination letter, (2) was aware that
such revocation was imminent, or (3) was
in part responsible for or was aware of the
activities or omissions of the organization
that brought about this revocation.
If on the other hand a suit for declara-
tory judgment has been timely filed, con-
tributions from individuals and organiza-
tions described in section 170(c)(2) that
are otherwise allowable will continue to
be deductible. Protection under section
7428(c) would begin on July 23, 2007, and
would end on the date the court first deter-
mines that the organization is not described
in section 170(c)(2) as more particularly
set forth in section 7428(c)(1). For indi-
vidual contributors, the maximum deduc-
tion protected is $1,000, with a husband
and wife treated as one contributor. This
benefit is not extended to any individual, in
wholeorinpart,fortheactsoromissions
of the organization that were the basis for
revocation.
Eagle A C, Inc.
Louisville, KY
Annie T. Smith Mercy Fund
Randolf, VT
2007–30 I.R.B.236July 23, 2007

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.
July 23, 2007i2007–30 I.R.B.

Numerical Finding List
1
Bulletins 2007–27 through 2007–30
Announcements:
2007-61, 2007-28 I.R.B.84
2007-62, 2007-29 I.R.B.115
2007-63, 2007-30 I.R.B.236
2007-64, 2007-29 I.R.B.125
2007-65, 2007-30 I.R.B.236
Notices:
2007-54, 2007-27 I.R.B.12
2007-55, 2007-27 I.R.B.13
2007-56, 2007-27 I.R.B.15
2007-57, 2007-29 I.R.B.87
2007-58, 2007-29 I.R.B.88
2007-59, 2007-30 I.R.B.135
2007-61, 2007-30 I.R.B.140
Proposed Regulations:
REG-119097-05, 2007-28 I.R.B.74
REG-103842-07, 2007-28 I.R.B.79
Revenue Procedures:
2007-42, 2007-27 I.R.B.15
2007-43, 2007-27 I.R.B.26
2007-44, 2007-28 I.R.B.54
2007-45, 2007-29 I.R.B.89
2007-46, 2007-29 I.R.B.102
2007-47, 2007-29 I.R.B.108
2007-48, 2007-29 I.R.B.110
2007-49, 2007-30 I.R.B.141
2007-51, 2007-30 I.R.B.143
2007-52, 2007-30 I.R.B.222
2007-53, 2007-30 I.R.B.233
Revenue Rulings:
2007-42, 2007-28 I.R.B.44
2007-43, 2007-28 I.R.B.45
2007-44, 2007-28 I.R.B.47
2007-45, 2007-28 I.R.B.49
2007-46, 2007-30 I.R.B.126
2007-47, 2007-30 I.R.B.127
2007-48, 2007-30 I.R.B.129
Treasury Decisions:
9327, 2007-28 I.R.B.50
9328, 2007-27 I.R.B.1
1
A cumulative list of all revenue rulings, revenueprocedures, Treasury decisions, etc., publishedin Internal Revenue Bulletins 2007–1 through 2007–26 is in Internal Revenue Bulletin
2007–26, dated June 25, 2007.
2007–30 I.R.B.iiJuly 23, 2007

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2007–27 through 2007–30
Notices:
2007-26
Modified by
Notice 2007-56, 2007-27 I.R.B.15
Revenue Procedures:
90-27
Superseded by
Rev. Proc. 2007-52, 2007-30 I.R.B.222
97-14
Modified and superseded by
Rev. Proc. 2007-47, 2007-29 I.R.B.108
2002-9
Modified and amplified by
Rev. Proc. 2007-48, 2007-29 I.R.B.110
Rev. Proc. 2007-53, 2007-30 I.R.B.233
2004-42
Superseded by
Notice 2007-59, 2007-30 I.R.B.135
2005-16
Modified by
Rev. Proc. 2007-44, 2007-28 I.R.B.54
2005-66
Clarified, modified, and superseded by
Rev. Proc. 2007-44, 2007-28 I.R.B.54
2006-25
Superseded by
Rev. Proc. 2007-42, 2007-27 I.R.B.15
2006-27
Modified by
Rev. Proc. 2007-49, 2007-30 I.R.B.141
2006-33
Superseded by
Rev. Proc. 2007-51, 2007-30 I.R.B.143
2006-55
Superseded by
Rev. Proc. 2007-43, 2007-27 I.R.B.26
Revenue Rulings:
74-299
Amplified by
Rev. Rul. 2007-48, 2007-30 I.R.B.129
89-96
Amplified by
Rev. Rul. 2007-47, 2007-30 I.R.B.127
92-17
Modified by
Rev. Rul. 2007-42, 2007-28 I.R.B.44
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2007–1 through 2007–26 is in Internal Revenue Bulletin 2007–26, dated June 25, 2007.
July 23, 2007iii2007–30 I.R.B.

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