SEC. 2. ERRORS IN TAXPAYMENT NOT AFFECTING RECORDS AND REPORTS. Where errors involving the underpayment or overpayment of tax are found in a brewer's records and such errors do not affect the quantities of beer removed subject to tax as reported on Form 103, Brewer's Monthly Report of Operations, and on Form 2051, Record of Brewery Operations, adjusting entries need be made only on the tax return Form 2034 in the spaces provided therefor. Similarly, where errors involving underpayment or overpayment of tax are found in a winemaker's records, and such errors do not affect quantities of wine removed subject to tax as reported on Form 2056, Record of Still Wine; Form 2057, Record of Effervescent Wine; and Form 702, Monthly Report of Wine Cellar Operations; adjusting entries need be made only on the tax return Form 2050. SEC. 3. ERRORS IN TAXPAYMENT AFFECTING ENTRIES IN RECORDS AND REPORTS. Where errors involving underpayment or overpayment of tax are adjusted on a return, Form 2034 or Form 2050, and such adjustments affect the quantities reported on a monthly report or in daily records for a previous month, brewers, as prescribed in section 4, and winemakers, as prescribed in section 5, shall make the necessary adjusting entries on their monthly reports and in their daily records. SEC. 4. PROCEDURES FOR BREWERS. .01 Where the quantity of beer previously reported on Forms 103 or 2051 is affected by adjustments made on a tax return, Form 2034, such adjustments shall be shown by special entries on current Forms 103 and 2051, as applicable. .02 Since part I of Form 103 is a balanced account, any understatement or overstatement of removals subject to tax must be balanced y an understatement or overstatement in one or more of the other items in the report. Consequently, adjustments shall be made by makng plus or minus entries interlined on the appropriate lines in columns (d) and (f) of the current Form 103 to correct the previous errors. No adjusting entries should be made in column (g); however, the totals in column (g) shall reflect the addition or subtraction of the djustments shown in columns (d) and (f). The totals, line 33, of columns (d) and (f) shall also reflect the adjusting entries. Similar djustments shall be made on the current Form 2051 by interlining olus or minus entries in the appropriate columns. Adjusting entries shall be fully explained in an unused space on Form 103 or Form 2051, as applicable, or in a separate attachment thereto. Where commercial records are kept in lieu of Form 2051, in accordance with the provisions of 26 CFR 245.225, appropriate adjusting entries shall be made therein. SEC. 5. PROCEDURES FOR WINEMAKERS. .01 Where the quantity of wine previously reported on Forms 702, 2056, or 2057 is affected by adjustments made on a tax return, Form 2050, such adjustments shall be shown by special entries on the current Forms 702, 2056, and 2057, as applicable. .02 Since part I of Form 702 is a balanced account, any understatement or overstatement of removals subject to tax must be balanced by an understatement or overstatement in one or more of the other items in the report. Consequently, adjustments shall be made by interlining plus or minus entries on appropriate lines and columns of part I, section A (and section B, if bottled wine is involved) of the current Form 702 to correct the previous errors. Totals for the columns in which the adjustments are made shall reflect the adjusting entries. Similarly, adjustments shall be made on the current Forms 2056 and 2057 by interlining plus or minus entries in the appropriate columns. Adjusting entries shall be fully explained by a notation in part X on Form 702 or in column (b) of Forms 2056 and 2057 or in a separate attachment thereto. SEC. 6. EFFECT ON OTHER DOCUMENTS. Revenue Ruling 55-323, C.B. 1955-1, 603, is hereby superseded. SEC. 7. INQUIRIES. Inquiries regarding this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax. 26 CFR 601.602: Forms and instructions. Rev. Proc. 67-31 Magnetic tape records for Form 1099, U.S. Information Return; Revenue Procedures 67-21, 67-22, and 67-23, C.B. 1967-1, 601, SECTION 1. PURPOSE .01 The purpose of this Revenue Procedure is to state require ments and conditions under which information reportable on US Information Return, Form 1099, Wage and Tax Statement, Form W-2, or Nominee's Information Return, Form 1087 (hereafter re ferred to collectively as information returns), may be submitted to the Service by payers, employers, or nominees (hereafter referred to collectively as payers), in the form of magnetic tape in lieu of original copies of paper documents. 02 This procedure replaces Revenue Procedure 66-32 dated July 25, 1966. The changes embodied herein are intended to clarify and simplify the requirements for magnetic tape reporting and to inprove Service processing. Although tape specifications have been revised, any magnetic tapes which fully met the requirements of Re enue Procedure 66-32 will be accepted in calendar year 1968. (See attachment I, sec. 1.02.) SEC. 2. APPLICATION FOR TAPE REPORTING .01 Information returns may be filed in the form of magnetic tape in lieu of paper documents. Such returns may be filed by payers, e by agents acting for a single payer or a group of payers. Tape re porting is not restricted to payers with the ability to submit all of their information on magnetic tape. A combination of tape records and paper documents are acceptable as long as there is no duplication or omission of documents. .02 Payers or agents who desire to file information returns in the form of magnetic tape must first file a letter of application. This letter should be addressed to the Director of Internal Revenue Servce Center in the region in which the payer or agent normally files eturns, marked "Attention, Chief of Planning Staff." Addresses of The Internal Revenue Service Centers are shown in section 8 of this Procedure. The letter of request must contain the following: (a) Name, address, and EI number of person, organization, or firm making the request. (b) Name, title, and telephone number of person to contact regarding the request. (c) An estimate, by type of form, of the number of returns to be reported in tape format, and the number, by type of form, to be reported on paper forms. (d) Type and nature of equipment to be used to prepare tape files, i.e., manufacturer and model of main frame and tape drives, tape width (12", 3/4", etc.,) density (characters per inch), and recording code (BCD, Excess 3, Octal, etc.). (e) Internal Revenue office where paper forms were filed last year. (f) List of payers to be included in the file if the requestor is an agent. (g) Signature of official responsible for the preparation of tax reports or his authorized agent. .03 Application for magnetic tape reporting must be filed by ovember 1st of the tax year for which authorization to file magnetic pe is being requested. The Service will act on applications and tify applicants of authorization or disapproval within 30 days of ceipt of applications. 04 Generally, payers using equipment compatible with the Serv's can presume that tape reporting will be approved. Compatible be characteristics are shown in attachment I, section 1.01. If payers agents have the capability to prepare several types of tapes, the vice prefers that compatible tapes be prepared. 05 If payers or agents propose to submit incompatible tapes, the vice will attempt to find conversion facilities. Generally, magnetic e reporting will be disapproved only when the Service is unable obtain facilities to convert a payer's file to a compatible form. 6 In general, once authorization to file magnetic tape has been nted to a payer, such approval will continue in effect in succeedyears, providing that the requirements of this Revenue Procee are met, and there are no equipment changes by the payer. wever, to provide the Service with the necessary planning informa, a renewal application must be filed. The Service will mail real applications by July 1 to all payers and agents who had filed e returns in prior years. Renewal application must be received by Service by November 1. The Service will act on renewal applicas within 30 days of receipt. SEC. 3. FILING OF TAPE RETURNS. .01 Packaging, shipping, and mailing instructions will be provided in the authorizing letter issued by the Service in response to an application for tape reporting or a renewal request. .02 Payers submitting a portion of their information returns on magnetic tape and the remainder on paper forms, should file magnetic tape records and paper documents at the same location and in the same shipment. .03 A single Form 1096 or W-3 will be required from each payer. to cover the entire shipment of returns, including those on paper and magnetic tape. For agents filing returns for several payers, the appropriate transmittal documents, Form 1096 or W-3 must be filed for each payer whose payments are included in the transmittal. .04 The dates prescribed for filing paper documents with the Service will also apply to magnetic tape filing. Requests for extensions of time for filing and related matters, should be made to the Service Center which has issued the authorizing letter, marked attention, Chief, Planning Staff. If an extension is granted by the Service, a copy of the letter granting the extension should be attached to the W-3 or 1096. .05 The magnetic tape specifications contained in attachment 1 to this Revenue Procedure, must be adhered to unless deviations have been specifically granted by the Service. .06 Service programs are flexible and may therefore be able to accommodate some minor deviations. Hence, payers who can substantially conform to these specifications but require such minor deviations are encouraged to contact the Chief of the Planning Staff at one of the Internal Revenue Service Centers (see sec. 8 below for addresses). However, under no circumstances may tapes deviating from the specifications in attachment 1 be submitted without prior approval of the Service. SEC. 4. PROCESSING OF TAPE RETURNS. .01 The Service will copy the information from the tapes. Nor mally, the original tapes received by the Service will be returned to the payers or agents by August 31 of the year in which submitted. 02 However, if the tapes submitted to the Service are unprocess able, and must be returned for correction prior to processing the will be returned within 6 months of receipt of acceptable tapes. SEC. 5. CORRECTED RETURNS. .01 The appropriate paper form will normally be used if it s necessary to correct payee records in the magnetic tape files. Ea Form 1099 or 1087 correcting a tape record must be annotated in t manner specified for corrected returns in Revenue Procedure 67-2 67-22 or 67-23 as appropriate. Corrected documents should conta all relevant information so that they completely supersede the retur recorded on tape. .02 Returns correcting paper documents may be submitted in t same shipment with tape returns (per sec. 2.01), but should bundled separately from other paper documents. When correctir: documents are shipped separately, corrected Forms 1096 or W-3 msalso be filed. .03 If a large volume of corrected returns are necessary and the payer or agent possesses the capability to provide such corrections on tape, he should contact the Chief of the Planning Staff at the Internal Revenue Service Center to which the tape returns were or are to be submitted. SEC. 6. EFFECT ON PAPER DOCUMENTS. .01 Reports on magnetic tape can be substituted for only the original copy (copy A) of Forms W-2, 1099, and 1087. When magnetic tape returns are filed in lieu of Forms 1099 or 1087, payers will not be required to furnish payees or other persons with copies which conform to the format and paper specifications of Revenue Procedures 67-21 or 67-22 as appropriate. However, payers must supply their payees with the information required to be shown on the paper forms, in a manner conducive to proper reporting on their tax returns. In addition, payers filing magnetic tape returns in lieu of Form W-2, must continue to furnish their payees with the prescribed forms or with paper substitutes which meet the requirements and specifications in Revenue Procedure 67-23. .02 If only a portion of the information returns is reported on magnetic tape and the remainder is reported on paper forms, those returns not submitted on magnetic tape must be filed on the appropriate prescribed forms, or on paper substitutes meeting the format requirements and paper specifications in Revenue Procedures 67-21, 67-22 or 67-23. SEC. 7. DATA ENTRIES. .01 The Service expects that payers will make every effort to keep to a minimum information returns submitted without taxpayer identifying numbers, through continued compliance with the requirements set forth in section 1.6109 of the Income Tax Regulations, and section 31.6109 of the Employment Tax Regulations. However, when a taxpayer identification number of a payee has not been furnished to the payer, the specifications in attachment I permit its omission. .02 The Service must be able to identify the surname associated with the taxpayer identifying number furnished on an information. return. When returns are received in the form of paper documents this is accomplished through a manual editing process. However, manual editing is precluded when returns are received on magnetic tape. Hence, the attached specifications include a data field in the payee records called "Name Control," in which the first four alphabetic characters of the payee surname are to be entered by payers. .03 If payers are unable to provide the first four characters of the payee surname, the specifications permit the submission of information. returns on magnetic tape with the Name Control field left blank. However, compliance with at least one and preferable both of the following will facilitate the Service computer programs required to generate the Name Control. (a) Record the surname on the first name line, (b) In cases of multiple payees, provide the required linkage by recording an asterisk immediately preceding the surname of the person whose identifying number has been provided. .04 Sometimes the payee identification recorded on the payer's records is lengthy, and exceeds the 80 characters allotted on the mag |