1
*/ We have been informally advised by the IRS that the notices
will be dated for June 25, but may be mailed sooner.
June 14, 1990
TO: CLOSED-END FUND MEMBERS NO. 22-90
OPERATIONS MEMBERS NO. 15-90
TAX MEMBERS NO. 19-90
UNIT INVESTMENT TRUST MEMBERS NO. 38-90
TRANSFER AGENT ADVISORY COMMITTEE NO. 15-90
RE: IRS ANNOUNCES JUNE "TEST RUN" FOR B NOTICES
__________________________________________________________
The attached IRS News Release states that the IRS will
"soon"*/1 be sending B Notice "test run" mailings to payors of
interest and dividends regarding 1988 information returns for
which payees' names and taxpayer identification numbers (TINs) do
not "match". This mailing regarding 1988 information returns was
originally scheduled to be sent last October as an official B
notice mailing, but was postponed after the Institute requested
that the mailing be a test run and be sent in the spring. (See
Institute Memoranda to Tax Committee No. 11-89, Unit Investment
Trust Committee No. 38-89, Closed-End Fund Committee No. 29-89,
Operations Committee No. 12-89, and Transfer Agent Shareholder
Advisory Committee No. 19-89, dated July 26, 1989 and to Tax
Members No. 34-89, Unit Investment Trust Members No. 51-89,
Closed-End Fund Members No. 46-89, Operations Members No. 30-89
and Transfer Agent Shareholder Advisory Committee No. 25-89,
dated October 4, 1989.)
As the upcoming mailing will not constitute an official B
Notice mailing, payors will not be required to contact
shareholders regarding "mismatches" or impose backup withholding
on accounts of shareholders who do not provide timely
certification of the TIN to the payor following notification of
the "mismatch". (See Institute Memorandum 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, and Transfer
Agent Shareholder Advisory Committee No. 16-89, dated July 14,
1989.) However, payors will be required, according to the IRS
News Release, to certify to the IRS within 60 days of the notice
the extent to which "due diligence" was exercised with respect to
each "incorrect" TIN. The penalty for filing a 1988 information
return with an incorrect TIN for which due diligence was not
exercised is $50 per failure.
The IRS News Release also indicates that the IRS plans to
send a mailing based upon 1989 information returns, to which the
B Notice procedures will apply, "later this year." We have been
informally advised by the IRS that these notices will be dated
October 15 and mailed in early October.
We will keep you informed of developments.
Keith D. Lawson
Associate General Counsel
Attachment