1 This year-end information often is referred to as “reclassified” tax information because of the practice at many brokerage
firms and banks to treat distributions from RICs and REITs as ordinary income until advised to “reclassify” the income, such
as to long-term capital gain.
2 RICs are to provide year-end income breakdowns for GNMAs & FNMAs and Repurchase Agreements only where the
information is otherwise available.
[11036]
June 3, 1999
TO: ACCOUNTING/TREASURERS COMMITTEE No. 18-99
BANK AND TRUST ADVISORY COMMITTEE No. 12-99
BROKER/DEALER ADVISORY COMMITTEE No. 12-99
OPERATIONS COMMITTEE No. 22-99
TAX COMMITTEE No. 11-99
TRANSFER AGENT ADVISORY COMMITTEE No. 34-99
RE: COMMENTS REQUESTED ON DRAFT 1999 YEAR-END UNIFORM TAX
REPORTING FORMATS
______________________________________________________________________________
As in prior years, the Institute has been working with representatives of the Securities Industry
Association (“SIA”), American Bankers Association (“ABA”) and the National Association of Real
Estate Investment Trusts (“NAREIT”) to improve the uniform reporting procedures pursuant to which
regulated investment companies (“RICs”) and real estate investment trusts (“REITs”) will report
“reclassified”1 year-end tax information.
Attached to this memorandum are drafts of “primary” and “secondary” uniform file formats to
be used by RICs to report 1999 year-end tax information to brokers and banks. The 1999 primary
uniform file format contains the information required to prepare IRS Forms 1099 for RIC shareholders.
The 1999 secondary uniform file format enables RICs to provide to brokers and banks 1999 year-end
income breakdowns (1) by State for municipal bond funds and (2) by type of security (i.e., Exempt
Federal Securities, GNMAs & FNMAs, Repurchase Agreements and Other Non-exempt Securities) 2 for
other bond funds.
Based on comments received, the following changes from the 1998 uniform file formats have
been incorporated into the examples and instructions for the 1999 uniform file formats. With one
exception, highlighted below, none of the clarifying changes incorporated into the 1999 uniform file
formats appear to require a programming modification.
PRIMARY AND SECONDARY UNIFORM FILE FORMATS
! Inclusion of Requested Reporting Date in Instructions The date by which the SIA has
requested that RICs provide all year-end tax information on the primary and secondary uniform
file formats has been included in the format instructions. For 1999, the SIA target dates are (1)
Friday, January 7, 2000 for information on the primary uniform file format and (2) Friday,
January 14, 2000 for information on the secondary uniform file format.
! Format for Reporting Numerical Data A clarifying instruction has been added requesting that
all numerical data on the formats only be expressed as four (4) digits after the decimal point. It
also is requested, where possible, that zero amounts be reported on the formats as dashes
(“—“), rather than as numerical zeros.
PRIMARY UNIFORM FILE FORMAT
! Revised or As Reported Column For 1998, column 1 of the primary uniform file format only
was used to indicate if a reported distribution had been “reclassified” since it was first
announced. For 1999, this column has been renamed “Status” and may be used to indicate
whether a reported distribution (1) has been reclassified since it was first announced, (2) reflects
a correction to data provided via an earlier transmission, or (3) is part of a “split-year” dividend
that is taxable (in part) in the following tax year. Examples for each of the above situations are
provided on the primary uniform file format.
NOTE: This revision appears to be the only change that may require a “programming”
modification from the 1998 Uniform File Formats.
! Request to List CUSIPs in Number Order A request has been added to the instructions that,
where possible, CUSIPs be listed in number order.
! Issuer Classification Categories An explanation of the difference between a “networked” and a
“non-networked” mutual fund has been included in the instructions.
! Record Date for Daily Dividend Funds Mutual funds that accrue dividends daily are instructed
to indicate “DAILY” in Item #8, Record Date.
SECONDARY UNIFORM FILE FORMAT
! Reporting Non-Exempt Distributions An instruction has been added to clarify that non-exempt
amounts (e.g., taxable market discount income), if any, distributed to shareholders of municipal
bond funds should be reported separately on the primary uniform file format as a taxable
distribution.
Finally, attached to this memorandum is a new reporting format only to be completed by RICs
that have declared an Undistributed Long-Term Capital Gain to be reported on IRS Form 2439. Given
the infrequency of these deemed distributions, it is not anticipated that RICs will “program” their
systems to accommodate this new format. Rather, it is expected that the format will be completed by
RICs on an “as-needed” basis and returned by facsimile to the brokers and banks.
ACTION REQUESTED:
Please provide your comments, if any, regarding the attached uniform file formats and
instructions to the undersigned (dflores@ici.org or 202 371-5436) or to Justine Phoenix of the Institute’s
Operations Department (justine@ici.org or 202 326-5850) no later than Monday, June 14, 1999. The
Institute will distribute the final 1999 uniform reporting formats and instructions shortly thereafter.
Deanna J. Flores
Assistant Counsel
Attachment