These instructions apply to any campus that will process Information Return Programs listed in the purpose above.

Use the following program codes as appropriate:

Account Type Code—a code in the Block Header Record (Form 1332 or Form 3893) distinguishing the entity or selection category of the return(s) in that block.

Change of Payer—any point in a block of returns at which any part of the Payer Filer entity changes.

Copy A — Form 1097 (Series), Form 1098 (Series), Form 1099 (Series), Form 3921, Form 3922 and Form 5498 (Series) should be in the correct scannable format, ink color, and tax year being processed. Copy A is the copy of the form which is submitted to the Service for processing. These forms can be separated into four categories:

Corrected Return — Return with "X" marked in the corrected box at the top of the form or the word "Corrected" or "Amended" is written on the information return.

Domestic Payer Return — any information return submitted on an official IRS information return or an approved substitute not meeting the definition for a Foreign Treaty Information Return.

Foreign Payer — any payer filing Foreign Treaty Information Returns.

Foreign Treaty Information Return — any information return furnished by foreign governments, businesses, or individuals to the Internal Revenue Service to report amounts paid to businesses or individuals claiming U.S. residency. These returns will not be submitted on official IRS information return forms that are processed in the normal domestic Information Return Program (IRP).

Parent Return — the return which transmits the related information returns. The payer entity on the parent return must agree with the payer entity on the forms they transmit (abbreviations of names are considered the same, but the Taxpayer Identification Number (TIN) must be an exact match).

Payer—Generally, payer information is found in the upper portion of Information Return Processing (IRP) documents. A payer may be identified on forms as one or more of the following:

Payee—Generally, payee information is found in the lower portion of IRP documents. A payee may be identified on forms as one or more of the following:

Payer Identifier—a gummed label or other identifier (such as highlighting) placed on the information return to signify a change of payer. It is used to alert ISRP to a change of payer and to accurately determine payer counts. Payer Identifiers may be attached by Receipt and Control or Document Perfection at the discretion of campus management. Form 1096 will be used in lieu of a gummed label for scannable forms.

Single Return Payer—any Payer for whom only one return is selected through the Detail Sort. All Single Return Payers should be combined and batched separately to eliminate the need for Payer Identifiers for ISRP processing. This does not apply to scannable returns.

TIN - (Taxpayer Identification Number), either SSN - (Social Security Number) or EIN - (Employer Identification Number).

Correspondence indicators — a two digit number which, if applicable, is coded on the Form 1096 to generate letters to filers who did not file correctly. These indicators also post to the Payer Master File (PMF) to establish a history of the filer.

Prior year return — a return which reports information that does not pertain to the tax year currently being processed (calendar year minus one or more). The Service does not process prior year Form 1097 (Series), Form 1098 (Series), Form 1099 (Series), Form 5498 (Series) and Form 3921 and Form 3922, however, the Service does process certain prior year Form 1096.

Late filing indicator—a character placed in the first box under the title "For Official Use Only" on the Form 1096. This indicator will post to the PMF for use in generating a late-filing notice to the payer.

Correspondence meeting Taxpayer Advocate Service Criteria will be routed per IRM 3.0.273.12.

Correspondence concerning other than information returns will be routed to the Accounts Management for review to determine appropriate action.

Correspondence concerning 50 or more recipient accounts being in error will be routed to the Payor Coordinator in the Underreporter Branch in Ogden. See Exhibit 3.10.8-2 for complete mailing address.

Correspondence concerning a CP 2000 notice. See Service Wide Research Program (SERP) under the Who/Where tab choose AUR Addresses (Open Cases) and determine the appropriate site. Include the provided stop number on each transmittal.

Correspondence concerning current year Form W-2 and Form W-3 will be forwarded to SSA. "Correspondence" concerning prior year Form W-2 and Form W-3, should be forwarded to the CAWR function. See Exhibit 3.10.8-2, Mail Stops and Addresses for Disposition of Informational Return Program, for the appropriate mailing addresses.

When a " letter or notice" from the CAWR Reconciliation Function is received from the taxpayer, the correspondence, as well as any forms or information submitted with it, should be sent to the CAWR Function. "Do not remove any of the information or forms" (Form 94X, Schedule H, Form 1096, Form W-2G, Form W-2, or Form W-3) submitted with the CAWR letter or notice received from the taxpayer. Use the complete street address and mail stops found in Exhibit 3.10.8-2 when routing information to CAWR.

If information returns have a CP 15 or CP 215 attached and the information returns are processable, do the following:

If dated before 09/30/2007, return to the issuing campus. The issuing campus name will be listed in the upper left hand corner of the notice.

If dated 10/01/2007 or after, send to the Philadelphia Campus Back Up Withholding (BUWH) unit. See Exhibit 3.10.8-2 for the Stop numbers.

All prior year Form 1096 must be date stamped upon receipt.

Prior year Form 1096 will be processed through ISRP. Refer to IRM 3.10.8.3.5. Once processing of Prior Year Form 1096 is complete, the Forms will be routed to SCRIPS for imaging before routing to the IRP Penalty unit in Philadelphia. See Exhibit 3.10.8-2.

Forward all prior year Form 1096 marked "PENALTY CONSIDERED" to the IRP Code and Edit function. Do not code the Delinquent Indicator or received date on these Form 1096; a penalty assessment has already been considered.

Process prior year Form 1096 marked "Reasonable cause or due diligence was exercised" or "Information Returns were unprocessable—PMF only" as timely filed returns.

Prior year Form 1099-R and Form W-2G will be processed as follows:

All current year Form 1096 transmitting Form 1097 series, Form 1098 series, Form 1099 series with the exception or type "G" and type "R" or Form 3921, Form 3922 and Form W-2G received after March 15 must be date stamped upon receipt. Do not date stamp Form 1096 transmitting Form 5498, Form 5498-SA, Form 1099-G or Form 1099-R. Follow general guidelines found in IRM 3.10.72 , Receiving, Extracting, and Sorting for date stamping late-filed returns.

Some Form 1096, even though received late, should not be date stamped or coded. The conditions for which a Form 1096 will not be date stamped or coded are given below:

If a payer sent in a letter explaining why the returns are late, date stamp the Form 1096 and forward to the IRP Unit for processing through SCRIPS or ISRP.

Delinquent current year Form 1096 received too late to be processed in the current processing year will be held until ISRP "start-up" for the next year IRP program.

Late filed Form W-3 transmitting Form W-2 must also be date stamped. If Form W-2 are received with a Form W-3, date stamp the first Form W-2 in the submissions. See IRM 3.10.8.2.2.

For Form 1099-DIV submissions that are received late and only have information reported in Box 5 and/or Box 6, "DO NOT" place a late filing indicator or received date on Form 1096.

Form W-2, Form W-2c, Form W-3, and Form W-3c will be processed as follows:

SSA Address- Send Copy A of Form W-2, Form W-2c, and Form W-3 for payers to

Copies A of Form W-2GU (Guam), Form W-2VI (Virgin Islands), and Form W-2NMI (North Mariana Islands) are not for IRS use. The transmittal for Form W-2GU, Form W-2VI and Form W-2NMI is Form W-3SS. Send to:

Copies A of Form W-2AS (American Samoa), are not for IRS use. The transmittal form for Form W-2AS is Form W-3SS. Send to:

Ensure that the payer's submission remains intact (Form W-3 with related Form W-2 (Copy A)), whether the submission is sent to SSA or the CAWR Reconciliation Function (as outlined in IRM 3.10.8.2 ). Do not staple Form W-3 to related Form W-2. Put the payer submission back into the original envelope/container that the records were received in.

Ship documents in accordance with IRM 3.13.62, Media Transport and Control following PII guidelines. Prepare Transmittal Form W-2. Ship documents on a weekly basis. SSA is required to acknowledge receipt.

Separate late-filed Form W-3 and Form W-2 from those that were timely filed. Annotate on the Form 3210"Delinquent Returns" . They can be mailed in the same shipment.

Form W-3 and Form W-2 that are received for subsequent tax years will be forwarded to SSA.

Only current year Form 1096, Form 1098 (Series), Form 1099 (Series), and Form 5498 will be processed through SCRIPS.

Form 1096 that are to be processed through SCRIPS must remain with the returns they transmit.

Official IRS forms are used or an identical substitute.

The information is typewritten or machine-printed within the parameters of any given field. Some returns may be received with all data typed or printed, except that the payer data is stamped or handwritten. This will not make the returns non-scannable.

Ensure that there are three information documents on a single page (two per page for Form 1097-BTC, Form 1099-B, Form 1099-DIV, Form 1099-MISC and Form 1099-R), not cut or separated, and one document per page for Form 1096.

If the returns meet the above criteria, disregard and or correct the following conditions:

The information is printed legibly but cannot be read by the scanner.

Consult the SCRIPS unit to clarify what can be read by the scanner.

All non-scannable forms which are not torn, cut or separated may be physically fed through the scanner for processing.

Refer to IRM 3.41.269.3.4 for specifics.

Non-transportable documents are those that are torn, cut or separated, or for any other reason will not be acceptable for processing by the scanner.

Prior year Form 1096 will be processed through ISRP.

Do not dispose of the Form 1097 (series), Form 1098 (series), Form 1099 (series), Form 5498 (series) and the Form 1096 transmitted if the Information Returns are current year.

When only one return is received for a payer, place the return in a group of single payer returns. Do this only for current year information returns.

When more than one return is received for a payer place the returns in a group of multiple payer returns. Do this only for current year information returns.

Sort current year returns by type of return making sure that the first return for each payer contains the correct payer name and TIN.

Any information return that is to be processed through ISRP must be batched and numbered.

Only current year Form 1096, and the SCRIPS processable Forms listed in IRM 3.10.8.3(6) will be processed through SCRIPS.

Form 1096 that are to be processed through SCRIPS must remain with the returns they transmit.

Sort returns by the categories of transportable and non-transportable. Centers are not required to sort the documents sent to SCRIPS by form type.

Transportable returns are those that are not torn, cut, or separated and can be physically sent through the scanner.

A non-transportable return is one that is torn, cut, separated, inappropriate size, or for any other reason will not be acceptable for processing through the scanner. Non-Transportable Form 1096 must be photocopied and made transportable even if transmitting ISRP processed only returns. The photocopies will be imaged through the scanner after ISRP processing and the transmittal image archived.

Form 1096, Form W-2G, and Form 1099-R for Prior years will be processed for CAWR Reconciliation.

If the entire payer's submission is for a subsequent tax year, hold the entire submission for the appropriate processing year in Receipt and Controls' inventory.

See IRM 3.10.8.2.5(1) for processing Form 1096 and Form W-2G filed after March 16.

Form 1096 and Form W-2G are sorted as follows:

Cross check the detail information returns against the parent return (Form 1096) to determine if all necessary information is present and matches.

For Payer TIN:

For Payer Name:

If all necessary information is not on the returns, but can be determined from the parent return, other returns from the same payer or any attached correspondence, edit the necessary information on the return and forward for processing.

If only the Payer TIN is missing and cannot be determined by cross checking other documents, follow research procedures to obtain a TIN.

Only if the Payer Name is missing, and cannot be determined by cross checking other documents, follow research procedures to obtain a Name.

If multiple Payer Names and/or Payer TINs appear, check attachments to determine which Payer name and/or TIN should be used. If the correct Payer name and/or TIN cannot be determined, follow research procedures to determine the correct name to be used for the TIN. Underline the first Payer Name and TIN listed on the first return for that payer and also on its parent Form 1096. Issue Letter 586C advising which name and number we used.

To ensure processing of only valid Form 1098, do the following:

The information processed on the Form 1096 is as follows:

In order to ensure that the returns are correctly transmitted and are in valid, processable formats, review each payer's returns.

If the payment type can be identified as belonging on a Form W-2 rather than Form 1099 (see examples below), send the documents back to the payer using Letter 1306(C). They should be filed with SSA as Form W-2. The following items should be reported on Form W-2:

If a Payer sends in Form 1099 (Series) with many kinds of income listed on a single form (i.e., dividends, interest, rents, royalties, etc. on the same form), pull the return and contact the payer using Letter 1865(C) or Letter 1865(SC).

A return should contain a Payee name, a Payee TIN and/or a mailable address. Unknown Payer names are not acceptable (except for Form 1099-R and Form W-2G). The following IDRS command codes (CC) may be used to assist in research: CC INOLE, CC PMFOL.

Returns selected for IRP processing must contain an amount in at least one specified payment field with the exception of "corrected" /"amended" returns or Form 1099-MISC with a mark in Box 9. If a return does not meet the criteria specified below, void the return by placing a "X" with a #2 pencil in the void box.

Keep a count of the number of Letter 1865(C) issued and the total number of information returns, by document type, considered temporarily unprocessable.

Unprocessable Information Returns should be identified within 10 days of receipt.

Issue the Letter 1865(C) with the appropriate paragraph to filers of unprocessable information returns. Check the Power of Attorney (POA)/Taxpayer Information Authorization (TIA) file using CC CFINQ before corresponding. Enclose with each letter:

Maintain the original suspense file until the payer resubmits correctly or for 45 calendar days, whichever comes first.

When the corrected returns are received, dispose of the original returns and process the new ones. Also, purge the letter from the suspense file for disposal.

If the name and address for a filer of unprocessable real estate transactions cannot be determined, destroy the entire submission.

If no reply is received, route the entire submission and the copy of the correspondence to the IRP Penalty Unit for penalty determination. See Exhibit 3.10.8-2 for the address in Philadelphia and mail Stop number.

If an issued letter is returned as undeliverable, do the following:

If the re-submission contains both unprocessable and processable information returns, separate the unprocessable returns from the processable returns.

The Service advises these filers of the proper way to prepare and file information returns. Improper filing impedes the workflow.

Form 1096 will be coded to generate correspondence letters for coded Form 1096. Check the Power of Attorney (POA) /Tax Information Authorization (TIA) file before corresponding using CC CFINQ.

Code the indicator in the two right most boxes under the title "For Official Use Only" on Form 1096. Use a #2 pencil. Write the indicator legibly and within the boundaries of the boxes.

Use both digits when coding a correspondence indicator.

Code indicator 99 on every Form 1096 which was created by IRS. Code "99" denotes IRS prepared the Form 1096, but no correspondence will be generated.

The SCRIPS system will create a report identifying payers who reported only Federal Income Tax Withheld (FTWH) on SCRIPS processable returns listed in IRM 3.10.8.3(6). This report may be generated on a daily basis.

Information returns reporting only federal income tax withheld are considered unprocessable.

Issue Letter 1865(C) to payer(s) identified on the FTWH report. Use as the unprocessable criteria the fact that Federal Income Tax Withheld was the only money amount reported on the information return(s).

Each page of the report will reflect one payer's filing of information returns which reported only Federal Income Tax Withheld. Photocopy and consolidate all pages reporting one payer's returns. The photocopy will be used as an enclosure to the Letter 1865(C) .

When the re-submission is received, check the upper right corner of the suspended copy of the FTWH report for a delinquent indicator and received date. If present, they will appear after an asterisk to the right of name line "1" in the format "MMDDYY" where "1" is the delinquent indicator and "MMDDYY" is the received date. Code the Form 1096 with this delinquent indicator and received date.

If the filer resubmits incorrectly or fails to respond, follow procedures below:

A non-transportable form is an information return that cannot be physically processed through the scanner. Cut, torn, or mutilated submissions are considered to be non-transportable forms/returns.

Create blocks of 99 information returns (98 for Form 1099-R).

For each block, create a duplicate of the actual block using blank forms.

Do not split a filers submission unless absolutely necessary.

Maintain the actual block with the duplicate block in one folder.

Group no more than 30 blocks in a batch.

If appropriate, batches can be less than 30 blocks.

Batch and block numbers need not be assigned at this time.

Batch Form 1096 according to the following:

Batch the Form 1096 in convenient groups and forward for IRP Code and Edit. Annotate on the batch holder that these are Form 1096 for Payer Master File Processing.

Form 8487