- 1 -
July 14, 1989
TO: TAX MEMBERS NO. 23-89
UNIT INVESTMENT TRUST MEMBERS NO. 36-89
CLOSED-END FUND MEMBERS NO. 29-89
OPERATIONS MEMBERS NO. 20-89
TRANSFER AGENT SHAREHOLDER ADVISORY COMMITTEE NO. 16-89
RE: IRS ANNOUNCEMENT OF MAGNETIC TAPE SPECIFICATIONS
FOR THIS FALL'S B NOTICES
__________________________________________________________
As we previously informed you, this fall the IRS will send
B Notices notifying payors of accounts for which incorrect
taxpayer identification numbers (TINs) were reported on 1988
information returns. (See Institute Memorandum to Tax Members
No. 45-88, Unit Investment Trust Members No. 50-88, Closed-End
Fund Members No. 42-88, Operations Members No. 25-88 and Transfer
Agent Shareholder Advisory Committee No. 20-88, dated August 5,
1988.) Unlike the two B Notice "test run" mailings sent last
year, this year's B Notice mailings will be "real" and payors
will need to comply with the B Notice procedures set forth in the
backup withholding regulations issued in November 1987 and
amended in April 1989. (See Institute Memorandum to Tax Members
No. 14-89, Unit Investment Trust Members No. 22-89, Closed-End
Fund Members No. 18-89, Operations Members No. 15-89 and Transfer
Agent Shareholder Advisory Committee No. 9-89, dated April 18,
1989 and Institute Memorandum to Tax Members No. 46-87, Unit
Investment Trust Members No. 31-87, Closed-End Fund Members No.
5-87, Operations Members No. 29-87 and Transfer Agent Shareholder
Advisory Committee No. 24-87, dated December 8, 1987.)
The attached IRS announcement sets forth the magnetic tape
specifications for the tapes on which the incorrect TIN
information will be transmitted by the IRS to payors. If a payor
has 500 or fewer incorrect TINs, however, the information will be
transmitted to the payor on paper. The IRS believes that
reviewing the tape specifications now will ensure sufficient time
for payors to update their computer programs before receiving the
tapes this fall.
The attached announcement also states that the IRS will
send B Notice mailings to payors in October. An IRS spokesperson
- 2 -
has informed the Institute that the date on the B Notice, which
will be the B Notice's effective date for purposes of the
requirement that payors send B Notices to payees within 5
business days after being notified of an incorrect TIN, will be
October 16, 1989. When the B Notice regulations were amended in
April 1989, the IRS stated that B Notice mailings would be sent
to payors approximately 2 or 3 weeks before the B Notice's
effective date. Consequently, it appears that the IRS will send
the B Notices to payors in early October.
We will keep you informed of developments.
Keith D. Lawson
Assistant General Counsel
Attachment