RP-2011-50

Use this Revenue Procedure to prepare Tax Year 2011 and prior year information returns for submission to Internal Revenue Service (IRS) electronically.

This Revenue Procedure is not revised every year. Updates will be printed as needed in the Internal Revenue Bulletin. General Instructions for Form 1042-S are revised every year. Be sure to consult current instructions when preparing Form 1042-S.

Following is a list of related instructions and forms for filing Form 1042-S Electronically:

The Internal Revenue Service (IRS), Information Returns Branch (IRB) encourages filers to make copies of the blank forms in the back of this publication for future use. You can also download forms and publications from the IRS Web Site at IRS.gov. These forms can also be obtained by calling 1-800-TAX-FORM (1-800-829-3676).

Revenue Procedures are generally revised annually to reflect legislative and form changes. Comments concerning this Revenue Procedure, or suggestions for making it more helpful, can be addressed to:

.01 The purpose of this Revenue Procedure is to provide the specifications for filing Form 1042-S with IRS/IRB electronically through the FIRE (Filing Information Returns Electronically) system. To connect to the FIRE system, point the browser to http://fire.irs.gov. The system is designed to support the electronic filing of information returns only. This Revenue Procedure must be used to prepare current and prior year information returns filed beginning January 1, 2012, and received by IRS/IRB by December 31, 2012.

.02 Generally, the box names on the paper Form 1042-S correspond with the fields used to file electronically; however, if discrepancies occur, the instructions in this Revenue Procedure govern when filing electronically.

.03 This Revenue Procedure supersedes Rev. Proc. 2010-33 published as Publication 1187, Specifications for Filing Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, Electronically.

.04 Refer to Part A, Sec.13, for definitions of terms used in this publication.

.05 Specifications for filing Forms W-2, Wage and Tax Statements, electronically are available from the Social Security Administration (SSA) only. Filers can call 1-800-SSA-6270 to obtain the telephone number of the SSA Employer Service Liaison Officer for their area.

.06 IRS/IRB does not process Forms W-2. Forms W-2 must be sent to SSA. IRS/IRB does, however, process waiver requests (Form 8508) and extension of time to file requests (Form 8809) for Forms W-2 and requests for an extension of time to provide the employee copies of Forms W-2.

.07 Every withholding agent (defined in Section 13) must file an information return on Form 1042-S to report amounts of U.S. sourced income that was paid during the preceding calendar year. See Publication 515 for additional guidance on what is considered U.S. sourced income. Form 1042-S must be filed even if there was no tax withheld because the income was exempt from tax under a U.S. tax treaty or the Code. This includes the exemption for income that is effectively connected with the conduct of a trade or business in the United States, or the tax withheld was released to the recipient. Amounts paid to bona fide residents of U.S. possessions and territories are not subject to reporting on Form 1042-S if the beneficial owner of the income is a U.S. citizen, national, or resident alien.

.08 The following Revenue Procedures and publications provide more detailed filing procedures for certain information returns:

Editorial changes have been made throughout this publication. Please read the entire publication carefully.

.01 Penalties associated with Information Return filing have increased significantly. Please see Part A, Sec. 12 for specific information.

.02 The FIRE system has a separate log on address for testing. See Part B, Sec. 3.

.03 The address and telephone number have changed for tax law questions concerning the requirements for withholding of tax on payments reported on Form 1042-S. See Part A, Sec.3.09, Note.

.01 All information returns filed electronically are processed at IRS/IRB. General inquiries concerning the filing of 1042-S Forms should be sent to the following address:

.02 All requests for an extension of time to file information returns with IRS/IRB or to the recipients, and requests for undue hardship waivers filed on Form 8508, are sent to the following address:

.03 The telephone numbers for electronic filing inquiries are:

.04 The current paper Instructions for Form 1042-S have been included in Publication 1187 for the convenience of filers. The Form 1042-T is used only to transmit Copy A of paper Forms 1042-S. When filing paper returns, follow the mailing instructions on Form 1042-T and submit the paper returns to the IRS Ogden Service Center, P.O. Box 409101, Ogden, UT 84409.

.05 Make requests for paper Forms 1042-S by calling the IRS at 1-800-TAX-FORM (1-800-829-3676) or via the IRS website at IRS.gov .

.06 Questions pertaining to electronic filing of Forms W 2 must be directed to the Social Security Administration (SSA). Filers can call 1-800-772-6270 to obtain the telephone number of the SSA Employer Service Liaison Officer for their area.

.07 Filers should not contact IRS/IRB if they have received a penalty notice and need additional information or are requesting an abatement of the penalty. A penalty notice contains an IRS representative’s name and/or telephone number for contact purposes; or, the filer may be instructed to respond in writing to the address provided. IRS/IRB does not issue penalty notices and does not have the authority to abate penalties. For penalty information, refer to the Penalty section of the paper Instructions for Form 1042-S.

.08 A taxpayer or authorized representative may request a copy of a tax return, including Form W-2 filed with a return, by submitting Form 4506, Request for Copy of Tax Return, to IRS. This form may be obtained by calling 1-800-TAX-FORM (1-800-829-3676). For any questions regarding this form, call 267-941-1000. This is not a toll-free number.

.09 Electronic Products and Services Support, Information Returns Branch (IRB), answers electronic, paper filing, and tax law questions from the payer community relating to the correct preparation and filing of information returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 8935, 5498, 8027, and W-2G). IRB also answers questions relating to the electronic filing of Forms 1042-S and 8955-SSA. Call 1-866-455-7438 or 304-263-8700 for specific information about electronic filing of Forms 1042-S, 8027, and 8955-SSA. Inquiries pertaining to backup withholding and reasonable cause requirements due to missing and incorrect taxpayer identification numbers are also addressed by IRB. Assistance is available year-round to payers, transmitters, and employers, Monday through Friday, 8:30 a.m. to 4:30 p.m. Eastern Time, by calling 1-866-455-7438 or via e-mail at mccirp@irs.gov. When sending e-mails concerning specific file information, include the company name and the electronic filename or Transmitter Control Code. Please do not submit TINs or attachments, because electronic mail is not secure and the information may be compromised. The Telecommunications Device for the Deaf (TDD) toll number is 304-579-4827 . Call as soon as questions arise to avoid the busy filing seasons at the end of January, February, and March. Recipients of information returns (payees) should continue to contact 1-800-829-1040 with any questions on how to report the information returns data on their tax returns.

.10 Form 4419, Application for Filing Information Returns Electronically (FIRE), Form 8809, Application for Extension of Time to File Information Returns, and Form 8508, Request for Waiver From Filing Information Returns Electronically, may be faxed to IRS/IRB at 1-877-477-0572 or 304-579-4105.

.01 Section 6011(e)(2)(A) of the Internal Revenue Code and the regulations thereunder provide that any person, including a corporation, partnership, individual, estate, and trust, who is required to file 250 or more information returns must file such returns electronically. Withholding agents who meet the threshold of 250 or more Forms 1042-S are required to submit the information electronically.

.02 These requirements apply separately to both originals and amended records filed electronically.

.03 All filing requirements that follow apply individually to each reporting entity as defined by its separate Taxpayer Identification Number (TIN), [Social Security Number (SSN), Employer Identification Number (EIN), Individual Taxpayer Identification Number (ITIN), or Qualified Intermediary Employer Identification Number (QI-EIN), Withholding Foreign Partnership Employer Identification Number (WP-EIN), Withholding Foreign Trust Employer Identification Number (WT-EIN)]. For example, if a corporation with several branches or locations uses the same EIN, the corporation must aggregate the total volume of returns to be filed for that EIN and apply the filing requirements to each type of return accordingly.

.04 The above requirements do not apply if the filer establishes undue hardship (see Part D, Sec. 5).

.05 Current and prior year data must be submitted in separate electronic transmissions. Each tax year must be a separate electronic file.

.06 Filers who have prepared their information returns in advance of the due date should submit this information to IRS/IRB no earlier than January 1 of the year the return is due.

.07 Do not report duplicate information. If a filer submits returns electronically, identical paper documents must not be filed. Duplicate filing may result in penalty notices being sent to recipients.

.08 Withholding agents should retain a copy of the information returns filed with IRS/IRB or have the ability to reconstruct the data for at least three years from the due date of the returns.

.01 IRS/IRB prepares a list of vendors who support electronic filing. Publication 1582, Information Returns Vendor List, contains the names of service bureaus that will produce or submit files for electronic filing. It also contains the names of vendors who provide software packages for payers who wish to produce electronic files on their own computer systems. This list is compiled as a courtesy and in no way implies IRS/IRB approval or endorsement.

.02 If filers engage a service bureau to prepare files on their behalf, the filers must not also report this data, as it will create a duplicate filing situation which may cause penalty notices to be generated.

.03 Publication 1582 is updated periodically. The most recent revision is available on the IRS website at IRS.gov. For an additional list of software providers, log on to IRS.gov and go to the Approved IRS e-file for Business Providers link.

.04 A vendor, who offers a software package, or has the capability to electronically file information returns for customers, and who would like to be included in Publication 1582 must submit a letter or e-mail to IRS/IRB. The request should include:

.01 Transmitters are required to submit Form 4419, Application for Filing Information Returns Electronically (FIRE), to request authorization to file information returns with IRS/IRB. A single Form 4419 may be filed. IRS/IRB encourages transmitters who file for multiple withholding agents or qualified intermediaries to submit one application and to use the assigned Transmitter Control Code (TCC) for all. Form 4419 is subject to review before the approval to transmit electronically is granted. IRS may require additional documentation. If a determination is made concerning the validity of the documents transmitted electronically, IRS has the authority to revoke the Transmitter Control Code (TCC) and terminate the release of files.

.02 Electronically filed returns may not be submitted to IRS/IRB until the application has been approved. Please read the instructions on the back of Form 4419 carefully. A Form 4419 is included in Publication 1187 for the filer’s use. This form may be photocopied. Additional forms may be obtained by calling 1-800-TAX-FORM (1-800-829-3676). The form is also available at IRS.gov .

.03 Upon approval, a five-character alpha/numeric Transmitter Control Code (TCC) beginning with the digits “22” will be assigned and included in an approval letter. The TCC must be coded in the Transmitter “T” Record. If a transmitter uses more than one TCC to file, each TCC must be reported on a separate electronic transmission. Please make sure that electronic files are submitted using the correct TCC.

.04 If any of the information (name, TIN or address) on Form 4419 changes, please notify IRS/IRB in writing by fax or mail so the IRS/IRB database can be updated. The transmitter should include the TCC in all correspondence.

.05 Form 4419 may be submitted anytime during the year; however, it must be submitted to IRS/IRB at least 30 days before the due date of the return(s) for current year processing. This will allow IRS/IRB the minimum amount of time necessary to process and respond to applications. Form 4419 may be faxed to IRS/IRB at 877-477-0572 or 304-579-4105 (not toll-free). In the event that computer equipment or software is not compatible with IRS/IRB, a waiver may be requested to file returns on paper documents.

.06 IRS/IRB encourages a transmitter who files for multiple withholding agents to submit one application and to use the assigned TCC for all withholding agents.

.07 If a withholding agent’s files are prepared by a service bureau, it may not be necessary for the withholding agent to submit an application to obtain a TCC. Some service bureaus will produce files, code their own TCC on the file, and send it to IRS/IRB for the withholding agent. Other service bureaus will prepare electronic files for the withholding agent to submit directly to IRS/IRB. These service bureaus may require the withholding agent to obtain a TCC to be coded in the Transmitter “T” Record. Withholding agents should contact their service bureaus for further information.

.08 Once a transmitter is approved to file electronically, it is not necessary to reapply each year unless:

.09 One Form 4419 may be submitted per TIN. Multiple TCCs will only be issued to withholding agents with multiple TINs. Only one TCC will be issued per TIN unless the filer has checked the application for the following forms in addition to the Form 1042-S: Forms 1097, 1098, 1099, 3921, 3922, 5498, W-2G, 8935, 8955-SSA and/or 8027. A separate TCC will be assigned for these forms.

.10 Approval to file does not imply endorsement by IRS/IRB of any computer software or of the quality of tax preparation services provided by a service bureau or software vendor.

.01 The due dates for filing paper returns with IRS also applies to electronic filing of Form 1042-S. Filing of these returns is on a calendar year basis.

.02 Form 1042-S filed electronically must be submitted to IRS/IRB on or before March 15.

.03 If any due date falls on a Saturday, Sunday, or legal holiday, the return or statement is considered timely if filed or furnished on the next day that is not a Saturday, Sunday, or legal holiday.

.04 Statements to recipients must be postmarked on or before March 15.

.01 The accuracy of data reported on Form 1042-S is reviewed and validated at the IRS Service Center. All fields indicated as “Required” in the record layouts in Part C must contain valid information. If the Service identifies an error, filers will be notified and required to provide correct information.

.02 Know your recipient! See Notice 2006-35, 2006-14 I.R.B. 708 for know-your-customer rules.

.03 The tax rate entered must be a valid tax rate based on the Internal Revenue Code or on a valid treaty article. The valid treaty rate is based on the recipient’s country of residence for tax purposes. The rate selected must be justified by the appropriate treaty. A valid Tax Rate Table is located in the Instructions for Form 1042-S.

.04 The Gross Income amount field must reflect pretax income. The Gross Income amount is the total income paid before any deduction of tax at source.

.05 If a qualified intermediary, withholding foreign partnership, or withholding foreign trust is acting as such, either as a withholding agent or as a recipient, the TIN reported must be a QI-EIN, WP-EIN, or WT-EIN and must begin with “98.” See the definition of a QI in Part A, Sec 13 or in the paper Instructions for Form 1042-S.

.06 Country Codes used must be valid codes taken from the Country Code Table. Generally, the use of “OC” or “UC” will generate an error condition. If a recipient is claiming treaty benefits, the Country Code can never be “OC” or “UC”.

.07 If a recipient is an “UNKNOWN RECIPIENT” or “WITHHOLDING RATE POOL,” no address should be present. These are the only two situations where a street address is not required.

.08 A U.S. TIN for a recipient is now generally required, particularly for most treaty benefits. The exceptions are very limited and are listed in Publication 515 and the current paper Instructions for Form 1042-S. Use recipient U.S. TIN type indicator 4 when a U.S. TIN is required but was not provided. Reduced tax rates are not applicable when using the TIN type 4 indicator.

.09 Apply the following formulas to determine U.S. Federal Tax Withheld (field positions 359-370 of the “Q” Record). Applying the formulas will determine what the correct amount of withholding should be. If a different amount was withheld, enter the amount that was actually withheld. The U.S. Federal Tax Withheld amount must be added to Withholding by Other Agents (field positions 371-382) and the total of the two fields will be reflected in the Total Withholding Credit (field positions 383-394). Also, ensure the appropriate indicator is used in position 761 (U.S. Federal Tax Withheld Indicator). All field positions described below are in the “Q” Record.

.10 The following is how to correctly report an Unknown Recipient. All entries are in the Recipient “Q” Record.

.11 When making a payment to an international organization (e.g., United Nations) or a tax-exempt organization under IRC 501(a), use Country Code “OC.” Use “UC” only when there is an “UNKNOWN RECIPIENT.”

.12 When using Exemption Code 4, the Recipient Country of Residence Code for Tax Purposes MUST be a VALID treaty country (e.g. if the recipient is a tax resident of Northern Ireland use United Kingdom). Do not use Exemption Code 4 unless the exemption of tax is based on a treaty claim. If the tax treaty reduces the tax rate but does not exempt the payment, enter 00 or blanks for the exemption code as indicated in the Q Record instructions for positions 46-47.

.13 Generally, payments under Income Codes 06 and 08 are not exempt from withholding, however, certain exceptions apply. See the current paper Instructions for Form 1042-S.

.14 If income is from gambling winnings (Income Code 28) or is not specified (Income Code 50), the tax rate must generally be 30%. This type of income is only exempt from withholding at source if the exemption is based on a tax treaty. These treaties are listed in Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

.15 If Income Code 20 (Earnings as an Artist or Athlete) is used, the Recipient Code must be 09. Do not use Recipient Code 01 (Individual), 02 (Corporation), or 03 (Partnership). Generally, the tax rate cannot be reduced even if a treaty may apply.

.16 When paying scholarship and fellowship grants (Income Code 15), the Recipient’s Country of Residence for Tax Purposes must be identified and cannot be “OC” or “UC.” Grants that are exempt under Code Section 117 are not required to be reported on Form 1042-S.

.17 If a student is receiving compensation (Income Code 19), or a teacher, or a researcher is receiving compensation (Income Code 18), all or part of which is exempted from tax under a tax treaty, the Country of Residence for Tax Purposes must be identified and cannot be “OC” or “UC.”

.01 If a Form 1042-S was filed with the IRS and the filer later discovered an error in the filing, an amended Form 1042-S must be filed as soon as possible.

.02 The electronic filing requirement for information returns of 250 or more applies separately to both original and amended returns.

.03 Amended returns should be filed as soon as possible. Amended returns filed after August 1 may be subject to the maximum penalty of $100 per return. Amended returns filed by August 1 may be subject to a lesser penalty. For information on penalties, refer to the Penalty section of the current paper Instructions for Form 1042-S. However, if a withholding agent discovers errors after August 1, the withholding agent is still required to file amended returns or be subject to a penalty for intentional disregard of the filing requirements. If a record is incorrect, all fields on that record must be completed with the correct information. Submit amended returns only for the returns filed in error. Do not submit the entire file. Furnish amended statements to recipients as soon as possible.

.04 If filers discover that certain information returns were omitted on their original file, they must not code these documents as amended returns. The file must be coded and submitted as an original file.

.05 Prior year data, original and amended, must be filed according to the requirements of this Revenue Procedure. If submitting prior year amended returns, use the record format for the current year and submit in a separate transmission. Use the actual year designation of the amended return in Field Positions 2-5 of the “T” Record. A separate electronic transmission must be made for each tax year.

.06 In general, filers should submit amended returns for returns filed within the last 3 calendar years.

.07 All paper returns, whether original or amended, must be filed with IRS, Ogden Service Center, P.O. Box 409101, Ogden, UT 84409.

.08 The “Q” Record provides a 20-position field (positions 72-91) for the recipient’s account number assigned by the withholding agent. This number should be included on the initial return and on the amended return. This is especially important when more than one information return of the same type is reported for a recipient. The account number is used by IRS to determine which information return is being amended. It is vital that each information return reported for a recipient have a unique account number. Do not enter a TIN in this field.

.09 The record sequence for filing amended returns is the same as for original returns.

.10 Following is a chart showing the steps to take when amending Form 1042-S:

.11 When correcting the Withholding Agent “W” Record, follow the two step correction process. When the “W” Record is being corrected, every Recipient “Q” Record reported under that incorrect “W” Record must be amended by zero filling all of the amount fields as described in Error Type 2, Transaction 1.

.12 For information on when an amended Form 1042 is required, refer to the Instructions for Form 1042.

.01 Section 6109 of the Internal Revenue Code establishes the general requirements under which a person is required to furnish a U. S. TIN to the person obligated to file the information return.

.02 The Withholding Agent must provide its EIN, QI-EIN, WP-EIN or WT-EIN as appropriate, in the “W” Record and “T” Record, if the Withholding Agent is also the transmitter.

.03 A recipient U. S. TIN (SSN, ITIN, EIN, QI-EIN, WP-EIN, WT-EIN) must be provided on every “Q” Record when:

.04 In the event the recipient does not have a U.S. TIN, the withholding agent should advise the recipient to take the necessary steps to apply for one.

.05 The recipient’s U.S. TIN and name combination are used to associate information returns reported to IRS/IRB with corresponding information on the recipient’s tax return. It is imperative that correct U.S. Taxpayer Identification Numbers (TINs) for recipients be provided to IRS/IRB. Do not enter hyphens or alpha characters. Entering all zeros, ones, twos, etc., will have the effect of an incorrect TIN.

.06 The withholding agent and recipient names with associated TINs should be consistent with the names and TINs used on other tax returns.

.01 Electronic reporting of Form 1042-S eliminates the need to submit paper documents to the IRS. CAUTION: Do not send Copy A of the paper forms to the IRS for any forms filed electronically. This may result in duplicate filing.

.02 Withholding agents are responsible for providing statements to the recipients as outlined in the current paper Instructions for Form 1042-S. Refer to those instructions for filing Form 1042-S on paper with the IRS and furnishing statements to recipients.

.03 Statements to recipients should be clear and legible. If the official IRS form is not used, the filer must adhere to the specifications and guidelines in Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, 8935, 8955-SSA, W-2G and 1042-S.

.04 The address for filing paper Forms 1042-S and Form 1042 is: Ogden Service Center, P.O. Box 409101, Ogden, UT 84409. Do NOT send paper Forms 1042-S or 1042 to IRS/IRB.

.01 The following penalties generally apply to the person required to file information returns. The penalties apply to electronic filers as well as to paper filers.

.02 Failure To File Correct Information Returns by the Due Date (Section 6721). If you fail to file a correct information return by the due date and you cannot show reasonable cause, you may be subject to a penalty. The penalty applies if, you fail to file timely, if you fail to include all information required to be shown on a return, or if you include incorrect information on a return. The penalty also applies if you file on paper when you were required to file electronically, you report an incorrect TIN or fail to report a TIN, or you fail to file paper forms that are machine readable.

The amount of the penalty is based on when you file the correct information return. The penalty is:

.03 A late filing penalty may be assessed for a replacement file which is not transmitted by the required date. See Part B, Sec. 4 .05, for more information on replacement files.

.04 Intentional disregard of filing requirements. If failure to file a correct information return is due to intentional disregard of the filing or correct information requirements, the penalty is at least $250 per information return with no maximum penalty.

.05 Failure To Furnish Correct Payee Statements (Section 6722). For information regarding penalties which may apply for a failure to furnish correct payee statements, see the Instructions for Form 1042-S.

.01 The following state and U.S. territory abbreviations must be used when developing the state code portion of address fields. This table provides state and territory abbreviations.

.02 When reporting APO/FPO addresses, use the following format:

.01 Electronic filing of Form 1042-S (originals, amended and replacement files) is a reporting method for filers submitting 250 or more Forms 1042-S. Payers who are under the filing threshold requirement are encouraged to file electronically.

.02 All electronic filing of information returns are received at IRS/IRB via the FIRE (Filing Information Returns Electronically) system. To connect to the FIRE system, point the browser to http://fire.irs.gov. The system is designed to support the electronic filing of information returns only.

.03 For files submitted through the FIRE system, it is the responsibility of the filer to check the status of the file within five business days to verify the results of the transmission. Information about the errors including the number of errors, a description, and the first occurrence will be provided on the FIRE system.. If additional information is needed to understand the errors, the filer can call 1-866-455-7438 or outside the U.S. at 304-263-8700.

.04 The electronic filing of information returns is not affiliated with any other IRS electronic filing programs. Filers must obtain separate approval to participate in each program. Only inquiries concerning electronic filing of information returns should be directed to IRS/IRB.

.05 Files submitted to IRS/IRB electronically must be in standard ASCII code. See Part C, Record Format Specifications and Record Layouts, for the proper record format. Do not send paper forms with the same information as electronically submitted files. This may create duplicate reporting resulting in penalty notices.

.06 Form 8809, Application for Extension of Time to File Information Returns, is available as a fill-in form via the FIRE system. Filers that do not already have a User ID and password should refer to Section 7. At the Main Menu, click “Extension of Time Request” and then click “Fill-in Extension Form.” This option is only used to request an automatic 30-day extension and must be completed by the due date of the return for each payer requesting an extension. Print the approval page for your records. Refer to Part D for additional details.

.01 Filers must obtain a Transmitter Control Code (TCC) assigned prior to submitting files electronically. Refer to Part A, Sec. 6, for information on how to obtain a TCC.

.02 Once a TCC is obtained, electronic filers assign their own user ID, password, and PIN (Personal Identification Number). See Part B, Sec. 5, for more information on the PIN.

.03 If a filer is submitting files for more than one TCC, it is not necessary to create a separate User ID and password for each TCC.

.04 For all passwords, it is the user’s responsibility to remember the password and not allow the password to be compromised. Passwords are user created at first logon and must consist of eight alpha/numeric characters containing at least one uppercase, one lowercase, and one numeric. The FIRE system requires users to change passwords every 90 days or at the first logon attempt after that time period. Users can change passwords at any time from the Main Menu. The previous 24 passwords cannot be used. Filers who forget the password or PIN can call 1-866-455-7438 or outside the U.S. at 304-263-8700 for assistance.

.01 Filers are not required to submit a test file; however, the submission of a test file is encouraged for all new electronic filers to test hardware and software. If filers wish to submit an electronic test file for Tax Year 2011 (returns to be filed in 2012), it must be submitted to IRS/IRB no earlier than November 1, 2011, and no later than February 15, 2012.

.02 IRS/IRB strongly encourages all electronic filers to submit a test. To connect to the FIRE Test System, point the browser to http://fire.test.irs.gov.

The test file must consist of a sample of each type of record:

.03 Use the Test Indicator “TEST” (upper case) in Field Positions 195-198 of the “T” Record to show this is a test file.

.04 IRS/IRB will check the file to ensure it meets the specifications of this Revenue Procedure. For current filers, sending a test file will provide the opportunity to ensure the software reflects all required programming changes. Filers are reminded that not all validity, consistency, or math error tests will be conducted.

.05 Filers who encounter problems while transmitting the electronic test file can contact IRS/IRB at 1-866-455-7438 or outside the U.S. at 304-263-8700 for assistance.

.06 Within five days after a file has been submitted, filers will be notified via e-mail as to the acceptability of the file if a valid e-mail address was provided on the “Verify Your Filing Information” screen. If using e-mail filtering software, configure the software to accept e-mail from fire@irs.gov and irs.e-helpmail@irs.gov. If the file is bad or an e-mail has not been received within five days, the filer must return to http://fire.test.irs.gov to determine what errors are in the file by clicking on CHECK FILE STATUS.

.01 Electronically filed information may be submitted to IRS/IRB 24 hours a day, seven days a week. Technical assistance is available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern Time by calling 1-866-455-7438 or outside the U.S. at 304-263-8700.

.02 The FIRE system will be down from December 16, 2011 through January 3, 2012. This allows IRS/IRB to make yearly updates to reflect current year changes. In addition, the FIRE system may be down every Wednesday from 2:00 a.m. to 5:00 a.m. ET for programming updates. The FIRE system will not be available for submissions during these times.

.03 A file may not exceed 899,999 records. When sending files larger than 10,000 records electronically, data compression is encouraged. WinZip and PKZip are the only acceptable compression packages. IRS/IRB cannot accept self-extracting zip files or compressed files containing multiple files. The time required to transmit information returns electronically will vary depending on the type of connection to the internet and if data compression is used. The time required to transmit a file can be reduced by as much as 95 percent by using compression. Transmitters that experience problems transmitting files with a scripting process should contact IRS/IRB at 1-866-455-7438 or 304-263-8700 for assistance.

.04 Transmitters may create files using self assigned filename(s). Files submitted electronically will be assigned a new unique filename by the FIRE system. The filename assigned by the FIRE system will consist of submission type (TEST, ORIG [original], AMEN [amended return], and REPL [replacement]), the filer’s TCC, and a four-digit sequence number. The sequence number will be incremental for every file sent. For example, if this is the first original file for the calendar year and the TCC is 22000, the IRS assigned filename would be ORIG.22000.0001. Record the filename. This information will be needed by IRS/IRB to identify the file, if assistance is required.

.05 If a file submitted timely is bad, the filer will have up to 60 days from the day the file was transmitted to transmit an acceptable replacement file. If an acceptable replacement file is not received within 60 days, the payer could be subject to late filing penalties. This only applies to files originally submitted electronically.

.06 The following definitions have been provided to help distinguish between an amended return and a replacement:

.07 The TCC in the Transmitter “T” Record must be the TCC used to transmit the file; otherwise, the file will be considered an error

.01 The user will be prompted to create a PIN consisting of ten numeric characters when establishing an initial User ID name and password.

.02 The PIN is required each time an ORIGINAL, AMENDED, or REPLACEMENT file is sent electronically and is permission to release the file. It is not needed for a TEST file. An authorized agent/transmitter may enter their PIN; however, the Withholding Agent is responsible for the accuracy of the returns. The payer will be liable for penalties for failure to comply with filing requirements. If there is a problem with a PIN, filers should call 1-866-455-7438 or outside the U.S. at 304-263-8700 for assistance.

.03 If the file is good, it is released for mainline processing after ten calendar days from receipt. Contact IRB at 1-866-455-7438 or outside the U.S. at 304-263-8700 within this ten-day period if there is a reason the file should not be released for further processing. If the file is bad, follow normal replacement procedures.

.01 The FIRE system is designed exclusively for the filing of Forms 1042-S, 1097, 1098, 1099, 3921, 3922, 5498, 8027, 8935-SSA and W-2G.

.02 A transmitter must have a TCC (see Part A, Sec. 6) before a file can be transmitted.

.03 Within five days of the electronic transmission, a filer will be notified by e-mail as to the acceptability of the file, if a valid e-mail address was provided on the “Verify Your Filing Information” screen. If using e-mail filtering software, configure the software to accept e-mail from fire@irs.gov and irs.e-helpmail@irs.gov. If the file is bad, the filer must return to http://fire.irs.gov (or http://fire.test.irs.gov if a test file) to determine what errors are in the file by clicking on “CHECK FILE STATUS.”

.01 Have the TCC and TIN available before connecting.

.02 Turn off pop-up blocking software before transmitting files.

.03 Make sure the browser supports the security standards listed below.

.04 Set the browser to receive “cookies.” Cookies are used to preserve the User ID status.

.05 Point the browser to http://fire.irs.gov to connect to the FIRE system or http://fire.test.irs.gov to connect to the FIRE test system (Nov. 1 through Feb.15).

.06 FIRE Internet Security Technical Standards are:

HTTP 1.1 Specification (http://www.w3.org/Protocols/rfc2616/rfc2616.txt)

SSL 3.0 or TLS 1.0. SSL and TLS are implemented using SHA and RSA 1024 bits during the asymmetric handshake.

SSL 3.0 Specifications

TLS 1.0 Specifications

The filer can use one of the following encryption algorithms, listed in order of priority, using SSL or TLS:

AES 256-bit (FIPS-197)

AES 128-bit (FIPS-197)

TDES 168-bit (FIPS-46-3)

.01 Publication 1187 is a Revenue Procedure used to provide the electronic filng specifications and format to filers of Forms 1042-S, it is not a tax law document. Therefore, this publication cannot provide for all possible reporting situations. For any given record entry, it is the responsibility of the filer to make sure the relevant tax law is applied to the record entry being made.

.01 This record identifies the entity preparing and transmitting the file. The transmitter and the withholding agent may be the same, but they need not be. The “T” Record contains information which is critical if it is necessary for IRS/IRB to contact the filer.

.02 The first record of a file MUST be a Transmitter “T” Record. The “T” Record must appear on each electronic file; otherwise, a replacement file will be requested.

.03 The “T” Record is a fixed length of 820 positions.

.04 All alpha characters entered in the “T” Record must be upper case.

.01 The “W” Record identifies the Withholding Agent.

.02 Enter a “W” Record after the initial “T” Record on the file, followed by the Recipient “Q” Records, and a Reconciliation “C” Record. Do not report for a withholding agent if there are no corresponding Recipient “Q” Records.

.03 Several “W” Records for different Withholding Agents may appear on the same Transmitter’s file.

.04 Each “W” Record is a fixed length of 820 positions.

.05 All alpha characters entered in the “W” Record must be uppercase.

.01 The “Q” Record contains name and address information for the Recipient of Income, Non-Qualified Intermediary or Flow-Through Entity, Payer, and all data concerning the income paid and tax withheld that is required to be reported under U.S. law. Each Recipient “Q” Record is treated as if it were a separate Form 1042-S.

.02 The “Q” Record is restricted to one type of income, one type of exemption code, and one tax rate. Under certain circumstances, it may be necessary to submit more than one “Q” Record for the same recipient. Failure to provide multiple Recipient “Q” Records when necessary may generate math computation errors during processing. This will result in IRS contacting you for correct information.

.03 Following are some of the circumstances when more than one “Q” Record for a recipient would be required:

.04 All recipient “Q” Records for a particular Withholding Agent must be written after the corresponding Withholding Agent “W” Record, followed by a Reconciliation “C” Record, and before the “W” Record for another Withholding Agent begins.

.05 All alpha characters entered in the “Q” Record must be upper case.

.06 The “Q” Record is a fixed length of 820 positions.

.07 Report income and tax withheld in whole dollars only. Round up or down as appropriate. To round off amounts to the nearest whole dollar, drop amounts under 50 cents and increase amounts of 50 to 99 cents to the next whole dollar. If there are two or more amounts to add together, figure the amount to be reported by including cents when adding and only round off the total figure to be reported. DO NOT enter cents.

.01 The “C” Record is a fixed record length of 820 positions and all positions listed are required. The “C” Record is a summary of the number of “Q” Records for each Withholding Agent, Gross Amount Paid, and Total Withholding Credit.

.02 This record will be written after the last “Q” Record filed for a given withholding agent. For each “W” Record and group of “Q” Records on the file, there must be a corresponding “C” Record.

.03 All alpha characters entered in the “C” Record must be upper case.

.01 The “F” Record is a fixed record length of 820 positions and all positions listed are required. The “F” Record is a summary of the number of withholding agents in the entire file.

.02 This record will be written after the last “C” Record of the entire file. End the file with an End of Transmission “F” Record. No data will be read after the “F” Record. Only a “C” Record may precede the “F” Record.

.03 All alpha characters entered in the “F” Record must be upper case.

.01 Filers can get an automatic 30-day extension of time to file by completing Form 8809, Application for Extension of Time To File Information Returns. An extension of time to file may be requested for Forms 1042-S. If requesting extensions of time for more than one payer, the extension of time requests must be submitted online or with an electronic file through the FIRE system.

.02 The fill-in Form 8809 may be completed online via the FIRE system. (See Part B, Sec. 7, for instructions on connecting to the FIRE system.) At the Main Menu, click “Extension of Time Request” and then click “Fill-in Extension Form.” This option is only used to request an automatic 30-day extension. Extension requests completed online via the FIRE system receive an instant response if completed properly and timely. If requesting an additional extension of time, a paper Form 8809 must be submitted. Requests for an additional extension of time to file information returns are not automatically granted. Requests for additional time are granted only in cases of extreme hardship or catastrophic event. The IRS will send a letter of explanation approving or denying requests for an additional extension of time. (Refer to .11 of this Section.)

.03 A paper Form 8809 may be submitted to IRS/IRB at the address listed in .09 of this section. This form may be used to request an extension of time to file information returns submitted on paper. Use a separate Form 8809 for each method of filing information returns used, i.e. electronically or paper. A separate Form 8809 must be completed for each payer. Form 8809 may be computer-generated or photocopied. Be sure to use the most recently updated version and include all the pertinent information.

.04 To be considered, an extension request must be postmarked, transmitted, or completed online by the due date of the returns; otherwise, the request will be denied. (See Part A, Sec. 7, for due dates.) If requesting an extension of time to file several types of forms, use one Form 8809; however, Form 8809 or an extension file must be submitted no later than the earliest due date. For example, if requesting an extension of time to file both Forms 1099-MISC and 1042-S, submit Form 8809 on or before February 28.

.05 As soon as it is apparent that a 30-day extension of time to file is needed, an extension request should be submitted. IRS/IRB does not begin processing extension requests until January. It may take up to 30 days for IRS/IRB to respond to a paper extension request. Extensions completed online via the FIRE system fill-in form option receive instant results.

.06 Under certain circumstances, a request for an extension of time may be denied. When a denial letter is received, any additional or necessary information must be resubmitted within 20 days.

.07 Requesting extensions of time for multiple withholding agents may be done by completing the online fill-in forms via the FIRE system. A separate online Form 8809 must be completed for each withholding agent.

.08 Withholding Agents/transmitters requesting extensions of time for multiple filers are required to submit the extension requests online via the fill-in form or in a file electronically (see Sec. 3 for the record layout). If requesting an additional extension, a signed Form 8809 must be faxed to IRB the same day as the transmission. Be sure to include a signature and the reason an additional extension is needed.

.09 All requests for an extension of time filed on Form 8809 must be sent using the following address:

.10 Requests for extensions of time to file postmarked by the United States Postal Service on or before the due date of the returns, and delivered by United States mail to IRS/IRB after the due date, are treated as timely under the “timely mailing as timely filing” rule. A similar rule applies to designated private delivery services (PDSs). Notice 97-26, 1997-17 I.R.B. 6, provides rules for determining the date that is treated as the postmark date. For items delivered by a non-designated Private Delivery Service (PDS), the actual date of receipt by IRS/IRB will be used as the filing date. For items delivered by a designated PDS, but through a type of service not designated in Notice 2004-83, 2004-52 I.R.B. 1030 the actual date of receipt by IRS/IRB will be used as the filing date. The timely mailing rule also applies to furnishing statements to recipients and participants.

.11 Transmitters requesting an extension of time via an electronic file will receive a denial letter, accompanied by a list of withholding agents/payers covered under that denial.

.12 If an additional extension of time is needed, a Form 8809 and/or extension file must be sent by the initial extended due date. Check line 7 on the form to indicate that an additional extension is being requested. An additional 30-day extension will be approved only in cases of extreme hardship or catastrophic event. If requesting an additional 30-day extension of time, submit the information return files as soon as prepared. Do not wait for IRS/IRB to respond to your request.

.13 If an extension request is approved, the approval notification should be kept on file. Do not send the approval notification or copy of the approval notification to IRS/IRB with the electronic file or to the service center where the paper returns are filed.

.14 Request an extension for the current tax year only.

.15 A signature is not required when requesting an automatic 30-day extension. If an additional 30-day extension is requested, Form 8809 must be signed. Failure to properly complete and sign Form 8809 may cause delays in processing the request or result in a denial. Carefully read and follow the instructions for Form 8809.

.16 Form 8809 may be obtained by calling 1-800-TAX-Form (1-800-829-3676). The form is also available at IRS.gov.

.01 The specifications in Sec. 3 include the required 200-byte record layout for requesting extensions of time submitted in an electronic file. The instructions for the information that is to be entered in the record are also included. Filers are advised to read this section in its entirety to ensure proper filing.

.02 If a filer does not have an IRS/IRB assigned Transmitter Control Code (TCC), Form 4419, Application for Filing Information Returns Electronically (FIRE), must be submitted to obtain a TCC. This number must be used to submit extension requests in an electronic file. (See Part A, Sec. 6.)

.03 If requesting an additional extension of time, a signed Form 8809 must be faxed to IRB the same day as the transmission. Be sure to include a signature and the reason an additional extension is needed.

.04 Transmitters submitting an extension of time via an electronic file should not submit a list of payer names and TINs with Form 8809 since this information is included in the electronic file. However, Line 6 of Form 8809 must be completed. The online fill-in Form 8809 cannot be used in lieu of the paper Form 8809 for electronic files.

.05 Do not submit tax year 2011 extension requests filed electronically before January 4, 2012.

.01 Positions 6 through 188 of the following record should contain information about the payer/withholding agent for whom the extension of time to file is being requested. Do not enter transmitter information in these fields. Only one TCC may be present in a file.

.01 Request an extension of time to furnish the statements to recipients of Form 1042-S by submitting a letter to IRS/IRB at the address listed in Part D, Sec. 1.09. The letter should contain the following information:

.02 Requests for an extension of time to furnish statements to recipients of Form 1042-S are not automatically approved. If approved, an extension will allow a maximum of 30 additional days from the due date. The request must be postmarked by the date on which the statements are due to the recipients.

.03 Generally, only the withholding agent may sign the letter requesting the extension for recipient copies. A transmitter must have a contractual agreement with the withholding agents to submit extension requests on their behalf. This should be stated in the letter of request for recipient copy extensions.

.04 Requests for extensions of time to file recipient copies for more than ten (10) withholding agents are required to be submitted electronically. (See Sec. 3, for the record layout.) When requesting extensions of time for recipient copies, a signed letter must be faxed to IRB by the transmitter the same day as the transmission. Be sure to include the reason an extension for the recipient copies is needed.

.05 Transmitters submitting an extension of time for recipient copies via an electronic file should not submit a list of payer names and TINs with the letter since this information is included in the electronic file.

.05 The online fill-in Form 8809 extension option cannot be used to request an extension to furnish statements to recipients.

.01 If a withholding agent is required to file electronically but fails to do so and does not have an approved waiver on record, the withholding agent will be subject to a penalty of $100 per return in excess of 250. (For penalty information, refer to the Penalty Section of the 2011 Instructions for Form 1042-S.

.02 If withholding agents are required to file original or amended returns electronically, but such filing would create an undue hardship, they may request a waiver from these filing requirements by submitting Form 8508, Request for Waiver from Filing Information Returns Electronically, to IRS/IRB. Form 8508 can be obtained on the IRS website at IRS.gov or by calling toll-free 1-800-829-3676 or International 304-263-8700.

.03 Although a withholding agent may submit as many as 249 amended returns on paper, IRS/IRB encourages electronic filing. Once the 250 threshold has been met, filers are required to submit any returns of 250 or more electronically. If a waiver for original documents is approved, any amended returns for the same type of returns will be covered under that waiver.

.04 Generally, only the withholding agent may sign Form 8508. A transmitter may sign if given power-of-attorney; however, a letter signed by the withholding agent stating this fact must be attached to Form 8508.

.05 A transmitter must submit a separate Form 8508 for each withholding agent. Do not submit a list of withholding agents.

.06 All information requested on Form 8508 must be provided to IRS/IRB for the request to be processed.

.07 The waiver, if approved, will provide exemption from the electronic filing requirement for the current tax year only. Withholding agents may not apply for a waiver for more than one tax year at a time.

.08 Form 8508 may be photocopied or computer-generated as long as it contains all the information requested on the original form.

.09 Filers are encouraged to submit Form 8508 to IRS/IRB at least 45 days before the due date of the returns. IRS/IRB does not process waiver requests until January. Waiver requests received prior to January are processed on a first come, first serve basis.

.10 All requests for a waiver should be sent using the following address:

.11 Waivers are evaluated on a case by case basis and are approved or denied based on criteria set forth in the regulations under section 6011(e) of the Internal Revenue Code. The withholding agent must allow a minimum of 30 days for IRS/IRB to respond to a waiver request.

.12 If a waiver request is approved, keep the approval letter on file. DO NOT send a copy of the approved waiver to the Ogden service center.

.13 An approved waiver only applies to the requirement for filing information returns electronically. The withholding agent must still timely file information returns with the Ogden service center on the official IRS paper forms or an acceptable substitute form.