IRS UPDATES REVENUE PROCEDURE ON PREPARING ELECTRONIC/ MAGNETIC MEDIA SUBMISSIONS FOR TAX YEAR 1993 RETURNS

* Rev. Proc. 93-31 supersedes Rev. Proc. 92-46, which was previously distributed to Institute members. (See Institute Memorandum to Tax Members No. 43-92, Operations Members No. 25-92, Closed-End Fund Members No. 32-92, Pension Members No. 19-92, Unit Investment Trust Committee No. 38-92, Accounting/ Treasurers Committee No. 32-92 and Transfer Agent Advisory Committee No. 35-92, dated July 9, 1992.) August 13, 1993 TO: ACCOUNTING/TREASURERS COMMITTEE NO. 25-93 CLOSED-END FUND MEMBERS NO. 22-93 OPERATIONS MEMBERS NO. 28-93 PENSION MEMBERS NO. 29-93 TAX MEMBERS NO. 29-93 TRANSFER AGENT ADVISORY COMMITTEE NO. 41-93 UNIT INVESTMENT TRUST COMMITTEE NO. 33-93 RE: IRS UPDATES REVENUE PROCEDURE ON PREPARING ELECTRONIC/ MAGNETIC MEDIA SUBMISSIONS FOR TAX YEAR 1993 RETURNS __________________________________________________________ The Internal Revenue Service ("IRS") has published Revenue Procedure 93- 31, also released as IRS Publication 1220, which updates the requirements for filing IRS Forms 1099 and 5498 for tax year 1993 electronically or on magnetic media.* This revenue procedure is to be used for electronic filings and for submissions on magnetic media (including ½-inch magnetic tape); IBM 3480/3490 compatible tape cartridges and 5¼-, 3½- and 8-inch diskettes. Other revenue procedures and publications, listed in Part A, Section 1 of Rev. Proc. 93-31, provide more detailed filing procedures for certain information returns. Section 2 of Part A describes the programming and editorial changes made by the new revenue procedure. However, the IRS expressly recommends that the revenue procedure be read in its entirety to ensure proper reporting. Among the relevant changes are the following: $ changes have been made to IRS Form 1099-R to (1) clarify how to report IRA/SEP distributions and (2) add additional distribution codes; $ a note has been added to the Taxpayer Identification Number ("TIN") field to encourage payors who submit records with missing TINs to attach a letter of explanation to IRS Form 4804 when submitting their data; $ the periods during which IRS will process test tapes has been changed; $ instructions have been added on how to make prior year corrections; $ New York State no longer participates in the combined Federal/State Filing Program; $ requests for a deviation from the required format will no longer be approved; $ payors are encouraged to review Part A, Section 20 (Major Problems Encountered) before submitting data; and $ data is not to be transmitted using the Information Reporting Program- Bulletin Board System ("IRP-BBS") between January 1 and January 10 (during which time the IRP-BBS will be updated to reflect current year changes). As in the past, the revenue procedure provides useful information determining the appropriate name/taxpayer identification number combination for an account. Section 15 of Part A provides guidelines for the appropriate Social Security or employer identification number for different types of accounts. Section 7 of Part B includes information (on pages 61 and 62) regarding the "name control" that can be used to help ensure that the name and corresponding taxpayer identification number for an account will "match" and prevent the possible issuance of a backup withholding notice. Anyone interested in receiving a copy of this revenue procedure should call the Institute's Theresa Brice at (202) 955-3525. We will keep you informed of developments. Keith D. Lawson Associate Counsel - Tax