SEC. 4. FUNDS SUPPLIED BY THIRD PARTIES.

.01 Section 3505 (b) of the Code imposes a personal liability upon a lender, surety, or other person who supplies funds to employers for the specific purpose of paying wages due employees of such employers when the following conditions exist:

(a) The supplier of funds advances funds to or for the account of an employer for the specific purpose of paying wages of the employer's employees, and

(b) At the time such funds are advanced, the supplier of funds has actual notice or knowledge (within the meaning of section 6323 (i)(1) of the Code) that the employer to whom the funds are advanced does not intend to or will not be able to make timely payment or deposit of the taxes required to be withheld. .02 The liability (for a sum equal to the taxes, together with interest) of the supplier of funds under this provision is limited to 25 percent of the amount he supplies the employer for the specific purpose of paying wages. Where a supplier of funds is liable, his liability (except as to the 25 percent limitation) is the same as that of a lender who pays the wages directly.

.03 Section 3505(b) of the Code is applicable in a case where the supplier of funds knows that the funds are to be used to pay net wages, even though the written agreement under which the advances are made states a different purpose. However, section 3505(b) of the Code does not apply to an ordinary working capital loan.

SEC. 5. PAYMENT OF TAx.

.01 The liability of the lender, surety, or other person, under section 3505 of the Code, is to pay the taxes only where the employer does not do so. Payment should be accompanied by Form 4219. Statement of Liability of Lender, Surety, or Other Person For Withholding Taxes, which is available at Internal Revenue Offices.

.02 A separate Form 4219 is to be submitted, in duplicate, for each employer and for each calendar quarter for which liability under section 3505 of the Code is incurred. The form is to be filed with the office of the Internal Revenue Service with which the employer for whom wages were paid or funds were supplied, files his Federal employment tax returns. The lender, surety, or other person may obtain assistance from the Internal Revenue Service, in the computation of his liability.

.03 To avoid the accrual of interest, payment should be made on or before the due date of the employer's Federal employment tax return. In the event the lender, surety, or other person does not volu tarily satisfy the liability imposed by section 3505 of the Code, the Government may collect such liability by appropriate civil proceeding .04 Section 3505 (c) of the Code provides that any amounts paid to the United States pursuant to section 3505 of the Code shall be credited against the liability of the employer. Therefore, payments by the lender, surety, or other person of withheld taxes reduce the liability of the employer.

SEC. 6. RESPONSIBILITIES OF EMPLOYER.

Section 3505 of the Code does not relieve an employer of his responsibilities with respect to such withholding taxes even thong" a lender, surety, or other person may be paying his employees' wag

The employer is required to file the usual employment tax returns and furnish statements of withholding tax to employees with respect to employees' wages paid by himself and by others.

26 CFR 601.602: Forms and instructions.

(Also Part I, Section 6011; 31.6011(a)−1.)

Rev. Proc. 67-42

Substitutes for Form 941a, Continuation Sheet for Schedule A of Forms 941, 941-M, 941SS, or 943, may be used in lieu of the official form, subject, however, to prescribed conditions.

Revenue Procedure 64-46, C.B. 1964-2, 983, superseded.

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to state the position of he Internal Revenue Service relating to acceptance of substitutes for Form 941a, Continuation Sheet for Schedule A of Form 941, 941-M, 041SS or 943, for filing purposes in lieu of the official form.

SEC. 2. BACKGROUND.

01 Schedule A (Form 941), Quarterly Report of Wages Taxable Under the Federal Insurance Contributions Act, provides space for isting the account numbers, names, wages and taxable tips, if any, of mployees. Form 941a is available to employers who need additional pace for listing of employees.

02 Substitutes for Form 941a may be privately printed and used without specific approval of the Internal Revenue Service only if all pecifications are completely met.

SEC. 3. SPECIFICATIONS.

.01 Basic Form.-The latest revision of the prescribed Form 941a hould be used as the basis for the privately printed form. A copy may e obtained from any District Director of Internal Revenue.

.02 Typography.-Type may not be smaller than the corresponding ype of the official form and should be as nearly as possible of the same

ont.

.03 Dimensions.-The official Form 941a is 8 inches by 11 inches. 'orms may vary in width from 7% inches to 81/2 inches plus/minus 031 inch. Depth of form must be 11 inches plus/minus 0.031 inch. 'hese dimensions must be maintained at time of manufacture. Grain ust run the 11-inch way.

.04 Paper Requirements.

(a) General. The paper must be white 100 percent bleached chemical wood (no optical brighteners may be added to the pulp or paper during manufacture, minimal trace amounts will be acceptable).

(b) Basis weight.-The basis weight of 1,000 sheets measuring 17 x 22 inches must be 40 pounds plus or minus 5 percent.

(c) Caliper.-The thickness of the paper must be 0.0038 inch, tolerance plus 0.0004 and minus 0.0002.

(d) Smoothness.-The smoothness (finish) of the document must give a reading of at least 100, but not greater than 200, as measured by a Sheffield Smoothness Tester. Paper with a smoothness reading of 150 will give the best result.

(e) Stiffness.-Document stiffness as measured by a Taber V-5 Tester must be as follows: machine direction, minimum 2.0, maximum 5.0, recommended 3.8, cross direction, minimum 1.0, maximum 3.0, recommended 2.0. If a Gurley Tester is used to measure stiffness, the readings should be: 150 machine direction; 72 cross direction.

(f) Paper reflectance. To be acceptable, a paper must attain certain minimum reflectance readings when tested by a Beckman DK2A Ratio Recording Spectroreflectometer. The test must be made with one sheet of the sample paper with a black matte backing.

If the magnesium oxide reading is considered as 100 percent, these minimum reflectance readings must be:

Wave length in angstroms:

3000

Reflectance

reading (percent)

Wavelengths in the range 3000-10,000 angstroms that are not shown in this table may be directly interpolated from these percentages.

An alternate method for measuring paper reflectance is to use Sperification T-452 of the Technical Association of the Pulp and Paper Industry (TAPPI). With this test, the paper must have a reflectance of at least 80 percent.

Marks or imperfections are permissible if they do not cause the reflectance from an area 0.006 inch in diameter to vary more than 10 percent from the background reflectance of the paper.

Reflectance as measured by a Kidder Mark Read Tester (MR-S must be at least 52 millivolts.

.05 Color and Quality of Ink.-All printing must be accomplishe with black non-reflective inks with good heavy coverage. A non-re flective ink is one which has a 10 percent reflectance or less when mess ured on a Reflectometer that simulates the spectral response of the sca ner and 19 millivolts or less when measured on a Kidder Mark Read Tester (MR-8) or equivalent device. When measured on a Kidd Model 081 OCR tester with infrared probe, reflectance of 20 perei or less is acceptable. The sample measured by the Kidder Mark Re Tester must have minimum dimensions equal to or greater than "Initial Positioning Mark." The 10 percent reflectance is referenced magnesium oxide which is 100 percent.

.06 Printing Locations and Tolerances.-Printers requesting production proofs will be furnished engineering drawings contain the timing track indicia printing locations and tolerances. The dim sions specified on these drawings must be maintained, within the s ulated tolerances, during printing.

.07 Taxable Tips Reported Column.-If this column is not nee for reporting tip income, it may be used for information not called: 4 on the official Form 941a such as State unemployment compensat No block out will be permitted on the original copy.

1

.08 Printer Identification.-Private printers of substitutes for Form 941a should identify themselves as having printed the substitutes by printing their Employer's Identification Number on the forms. Such identification must consist of the number only, set in 6-point or smaller type. The number must be positioned 1/4 inch below the dollar mark, appearing on the official Form 941a, in the "Taxable Tips Reported" column and 1 inch to the right of the "Taxable F.I.C.A. Wages" column track (see Exhibit I).

09 No printing may appear on the reverse side of Form 941a. 10 The Government Printing Office Symbols. To be omitted. SEC. 4. VARIATIONS IN WIDTH OF COLUMNS AND DEPTH OF FORM. If users do not prefer to use the standard form and overlay furnished by the Service, they must redesign the form within the exact tolerances shown on the engineering drawing. After redesign the user must submit a written request with two samples of the proposed reproduction o the Commissioner of Internal Revenue, Attention: D:S:Pl, Washngton, D.C. 20226, for consideration. In general, substitute forms may leviate from the official form only as follows:

.01 A proposed substitute form may vary in depth from 812 inches o 11 inches plus/minus 0.031 inch.

02 The first three columns from the left, namely "Employee's Soial Security Account Number," "Name of Employee," and "Taxable .I.C.A. Wages," of a proposed substitute form may not be wider than he columns of the official form. The same columns of substitute forms ay be narrower than the columns of the official form; however, each olumn must be adequate for reporting information therein. To faciliate employer's recordkeeping, the extreme right column may be wider han that of the official form.

.03 Printers and/or users requesting substitute forms that vary as sted in .01 and .02 above will be required to prepare artwork for the verlay that will meet the highly critical dimensions given in the engieering drawing.

EC. 5. ADDITIONAL INSTRUCTIONS.

.01 Only the originals of privately printed forms should be filed' ith the Internal Revenue Service; copies and reproductions of any ind are not acceptable.

.02 If the forms are printed in continuous style, they must be sepated before filing. Marginal holes for pin feed devices and stubs at e top or bottom of the form must be removed before filing with the ervice. The forms when filed must be within the dimensions specified Sections 3.03 and 4.01 above.

.03 It is preferred that the names and account numbers of employs to whom no taxable wages were paid during the quarter covered by e report be omitted. If listed, they should be grouped at the end of e report. In the event this is not feasible, the items may be listed. ithin the report.

.04 Clear, black typing is a prerequisite for optical scanning. Emoyers processing Form 941a over equipment such as typewriters, counting machines, high-speed printers, etc. are requested to use a

black ribbon and to take any other measures that will guarantee a clear, sharp image to facilitate scanning. In addition, all typing must be positioned at least 1/16 inch from all tracks and rules printed in the reporting area, the page totals should be no closer than 1 inch. SEC. 6. REPRODUCTION PROOFS.

.01 Order blanks for reproduction proofs are mailed annually to requesters of record and, on request, to other users. Printers and others wishing to obtain reproduction proofs and/or dimensionally stable film positive overlays of the timing track indicia, for the standard 7% to 81⁄2 inches by 11 inches size only, may send their requests to the Commissioner of Internal Revenue, Attention: A:FM:P, 1111 Consti tution Avenue NW., Washington, D.C. 20224.

02 Engineering drawings containing the timing track indicia, printing locations, and tolerances will be furnished with each order for reproduction proofs and/or film positive overlays. The drawings are available to other users upon request.

.03 A charge of $0.75 for each reproduction proof and $3.00 for each dimensionally stable film positive overlay of the timing track indicia will be made. Invoices will be mailed after orders have been filled. There will be no charge for engineering drawings.

SEC. 7. EFFECT ON OTHER DOCUMENTS.

This Revenue Procedure supersedes Revenue Procedure 61-46, C.B. 1964-2, 983.