.01 The purpose of this revenue procedure is to update Rev. Proc. 2001-16, 2001-4 I.R.B. 376, IRS Pub. 1245 Rev. 02-2003, which outlines the requirements and conditions for submitting certain Forms W-4, Employee’s Withholding Allowance Certificate, electronically or magnetically to the Internal Revenue Service (IRS), Enterprise Computing Center — Martinsburg (ECC-MTB).

.02 Revenue procedures are generally revised to reflect legislative, regulatory and form changes. Comments concerning this revenue procedure or suggestions for making it more helpful can be addressed to Internal Revenue Service, Enterprise Computing Center — Martinsburg, ATTN: Information Reporting Program, 230 Murall Drive, Kearneysville, WV 25430.

.03 The following revenue procedures and publications provide more detailed filing procedures for certain information returns and can be obtained on our web site www.irs.gov or by calling 1-800-829-3676:

.04 Refer to Part A, Sec. 9, for definitions of terms used in this publication.

Numerous editorial changes have been made to this revenue procedure. Please read the publication carefully and in its entirety before attempting to prepare your electronic/magnetic file for submission. Major changes are italicized. The changes are as follows:

.01 Employers are no longer required to routinely submit Forms W-4 to the Service. However, Forms W-4 are still subject to review. Employers may be directed (in a written notice or in future published guidance) to send certain Forms W-4 to the Service.

.02 IRS/ECC-MTB no longer accepts 8mm, 4mm, Quarter-Inch Cartridges (QIC ) for the processing of information returns. Filing with 3¹/₂-inch diskettes will be discontinued for Tax Year 2006. While IRS/ECC-MTB will accept 3¹/₂-inch diskette filing for Tax Year 2005, specifications were deleted from this revision since this publication is revised infrequently. Filers should consult previous revisions for diskette specifications if you are planning to submit 3¹/₂-inch diskettes this year.

.03 The Martinsburg Computing Center’s name was changed to the Enterprise Computing Center — Martinsburg (ECC-MTB).

.04 The title of Publication 1245 is changed to Specifications for Filing Form W-4 Employee’s Withholding Allowance Certificate, Electronically or Magnetically.

.05 Part B, Electronic Filing Specifications, was completely revised. Please read carefully. We now offer an internet connection at http://fire.irs.gov.

.06 The organization of information in Publication 1245 was changed for emphasis and clarity. Part D, Miscellaneous Information, was deleted since this information is found in Part A, Sec. 3. Part B is now Electronic Filing Specifications, Part C is Magnetic Media Specifications.

.07 Additional editorial changes of a clarifying nature have been made throughout this publication. Please read the entire publication carefully.

.01 All Forms W-4 filed electronically or magnetically are processed at IRS/ECC-MTB. Magnetic media containing Forms W-4 is to be sent to the following address:

.02 Requests for paper forms and publications can be made by calling the “Forms Only Number” listed in your local telephone directory or by calling the IRS toll-free number 1-800-TAX-FORM (1-800-829-3676).

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

.04 A taxpayer or authorized representative may request a copy of a tax return or a 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).

.05 The Information Reporting Program Customer Service Section (IRP/CSS), located at IRS/ECC-MTB, answers electronic/magnetic media, paper filing, and tax law questions from the payer community relating to the correct preparation and filing of business information returns (Forms 1096, 1098, 1099, 5498, 8027, W-2G, and W-4). IRP/CSS also answers questions relating to the electronic/magnetic media filing of Forms 1042-S and to the tax law criteria and paper filing instructions for Forms W-2 and W-3. Inquiries dealing with backup withholding and reasonable cause requirements due to missing and incorrect taxpayer identification numbers are also addressed by IRP/CSS. Assistance is available year-round to payers, transmitters, and employers nationwide, Monday through Friday, 8:30 a.m. to 4:30 p.m. Eastern time, by calling toll-free 1-866-455-7438 or via email at mccirp@irs.gov. Do not include SSNs or EINs in emails since this is not a secure line. The Telecommunications Device for the Deaf (TDD) toll number is 304-267-3367. Call as soon as questions arise to avoid the busy filing seasons at the end of January and February. 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.

.06 Telephone inquiries may be made Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern time. The telephone numbers for electronic/magnetic media inquiries or electronic submissions are:

.01 On April 14, 2005, the IRS issued temporary regulations (Treasury Decision 9196, 2005-19 I.R.B. 1000) that eliminated the requirement that employers routinely send copies of these potentially questionable Forms W-4 to the IRS. However, Forms W-4 are still subject to review. Employers may be directed (in a written notice or in future published guidance) to send certain Forms W-4 to the Service. These temporary regulations provide rules for the submission of copies of certain Forms W-4 to the IRS, the notification provided to the employer and the employee of the maximum number of exemptions permitted (“lock-in letters”), and the use of substitute forms. See T.D. 9196 at http://www.irs.gov/pub/irs-irbs/irb05-19.pdf.

.02 When instructed by IRS, employers may submit all information electronically or magnetically; a combination of electronic/magnetic files and paper documents is acceptable, provided there are no duplications or omissions of documents.

.03 Electronic/magnetic reporting to IRS eliminates the need to submit copies of paper Forms W-4.

.04 If part of the Forms W-4 are reported electronically/magnetically and the remainder are reported on paper forms, the paper Forms W-4 must be mailed to the Cincinnati Service Center, Cincinnati, OH 45999.

.01 Employers, or their transmitters, who wish to file Forms W-4 electronically or magnetically, must first submit a Form 4419, Application for Filing Information Returns Electronically/Magnetically. Instructions for its completion are on the reverse of the form.

.02 Electronic/magnetic files may not be submitted to IRS/ECC-MTB until authorization to file is received by the employer. Requests will be approved or disapproved within 30 days of receipt.

.03 Once authorization to file has been granted, a five-character alpha/numeric Transmitter Control Code (TCC) will be assigned. Approval will continue in effect in succeeding years provided the requirements of the current revenue procedure are met. Although a TCC may have already been assigned to a transmitter for the filing of other information returns, the Form W-4 requires a separate TCC. This TCC must appear on all transmittal forms submitted with electronic/magnetic files, as well as other correspondence. The TCC must also be coded into positions 319-323 of the Form W-4 record. (See Part C, Sec. 3.)

.04 A new application (Form 4419) is required if:

.01 Employers who choose to file electronically/magnetically must send a Form 6466, Transmittal of Forms W-4 Reported Electronically/Magnetically, to the IRS/ECC-MTB as prescribed in Part A, Sec. 3.

.02 Form 6466 MUST be signed by the employer or the transmitter, service bureau, paying agent, or disbursing agent (all hereafter referred to as agent), on behalf of the employer if the agent has the authority to sign the affidavit under an agency agreement (either oral, written, or implied) that is valid under state law and adds the caption “FOR: (name of employer).”

.03 Although a duly authorized agent signs the affidavit, the employer(s) is held responsible for the accuracy of the Forms W-4 filed electronically or magnetically.

.04 DO NOT REPORT THE SAME INFORMATION ON PAPER DOCUMENTS THAT YOU REPORT ELECTRONICALLY/MAGNETICALLY. If you report part of your Forms W-4 on paper and part electronically or magnetically, be sure that duplicate information is not included on both.

.05 Before submitting your electronic/magnetic file, include the following:

.06 IRS/ECC-MTB will not return filers’ magnetic media after it has been successfully processed. Should filers wish to know if their media was received by IRS/ECC-MTB, a delivery service that provides certification of delivery is recommended.

.07 IRS cannot accept any Collect-On-Delivery (COD) or Charged-to-IRS shipments of reportable tax information that an individual or organization is legally required to file. Because of the high volume of data received and shipping cost involved, special shipping containers will not be returned.

THE ELECTRONIC/MAGNETIC MEDIA SPECIFICATIONS CONTAINED IN PART B AND C OF THIS REVENUE PROCEDURE MUST BE STRICTLY ADHERED TO. If ECC-MTB cannot process your files, we will request replacement files. Replacement files must be submitted to IRS/ECC-MTB within 45 days of the date of the enclosed letter. The media should be identified as replacement data by writing, typing or printing “Magnetic Media Replacement” on the external label of the magnetic media and marking the replacement box on the Form 6466. If filing electronically, you should choose replacement when asked for the type of submission to identify a replacement file before transmission begins.

.01 The following state and U.S. territory abbreviations are to be used when developing the state code portion of address fields.

.02 Filers must adhere to the city, state, and ZIP Code format for U.S. addresses. This also includes American Samoa, Federated States of Micronesia, Guam, Marshall Islands, Northern Mariana Islands, Puerto Rico, and the U. S. Virgin Islands.

.01 Electronic filing of Forms W-4 information returns, originals and replacements, is offered as an alternative to magnetic media (tape cartridge or diskette) or paper filing. If the original file was sent magnetically, but IRS/ECC-MTB has requested a replacement file, the replacement may be transmitted electronically. Also, if the original file was submitted via magnetic media, any corrections may be transmitted electronically.

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

.03 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 of them. Only inquiries concerning electronic filing of information returns should be directed to IRS/ECC-MTB.

.04 Files submitted to IRS/ECC-MTB electronically must be in standard ASCII code. Do not send magnetic media or paper forms with the same information as electronically submitted files. This would create duplicate reporting.

.05 The record format is the same for both electronically or magnetically filed records. See Part C, Magnetic Media Specifications.

Some of the advantages of filing electronically are:

.01 Filers must obtain a Transmitter Control Code (TCC) prior to submitting files electronically. Filers who currently have a TCC for magnetic media filing for Form W-4 may use their assigned TCC for electronic filing. Refer to Part A, Sec. 5, 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) and do not need prior or special approval. 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 logon 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 assigned at first logon and must be 8 alpha/numerics containing at least 1 uppercase, 1 lowercase, and 1 numeric. However, filers who forget their password or PIN, can call toll-free 1-866-455-7438 for assistance. The FIRE System may require users to change their passwords on a yearly basis.

.01 Electronically filed information may be submitted to IRS/ECC-MTB 24 hours a day, 7 days a week. Technical assistance will be available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern time by calling toll-free 1-866-455-7438.

.02 The FIRE System will be down from December 23, 2005 through January 3, 2006. This allows IRS/ECC-MTB to update its system to reflect current year changes.

.03 If you are sending files larger than 10,000 records electronically, data compression is encouraged. If you are considering sending files larger than 5 million records, please contact IRS/ECC-MTB for specifics. WinZip and PKZip are the only acceptable compression packages. IRS/ECC-MTB cannot accept self-extracting zip files or compressed files containing multiple files. The time required to transmit information returns electronically will vary depending upon 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.

.04 Transmitters may create files using self assigned files name(s). Files submitted electronically will be assigned a new unique file name by the FIRE System. The filename assigned by the FIRE System will consist of submission type (ORIG [original], CORR [correction], and REPL [replacement]), the filer’s TCC and a four digit number sequence. The sequence number will be incremented for every file sent. For example, if it is your first original file for the calendar year and your TCC is 44444, the IRS assigned filename would be ORIG.44444.0001. Record the filename. This information will be needed by ECC-MTB to identify the file, if assistance is required.

.05 If a file was transmitted timely and is bad, the filer will have up to 60 days from the day the file was sent to transmit an acceptable file. This only applies to files originally submitted electronically.

.06 The following definitions have been provided to help distinguish between a correction 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 Filers will be prompted to create a PIN consisting of 10 numeric characters when establishing their initial logon name and password.

.02 The PIN is required each time an ORIGINAL, CORRECTION, or REPLACEMENT file is sent electronically and is permission to release the file. It is not needed for a TEST file. An authorized agent may enter their PIN, however, the payer is responsible for the accuracy of the returns. If you forget your PIN, please call toll-free 1-866-455-7438 for assistance.

.01 The FIRE System is designed exclusively for the filing of Forms 1042-S, 1098, 1099, 5498, 8027, W-2G and W-4.

.02 A transmitter must have a TCC (see Part A, Sec. 5) before a file can be transmitted. A TCC assigned for magnetic media filing of Forms W-4 should also be used for electronic filing.

.03 The results of the electronic transmission will be available in the CHECK FILE STATUS area of the FIRE System within 20 business days. It is the filer’s responsibility to verify the acceptability of files submitted by selecting the CHECK FILE STATUS option.

.01 Point your browser to http://fire.irs.gov to connect to the FIRE System.

.02 When running Norton Internet Security or similar software, you may need to disable this feature if your file transfer does not complete properly.

.03 Before connecting, have your TCC and EIN available.

.04 Your browser must support SSL 128-bit encryption.

.05 Your browser must be set to receive “cookies”. Cookies are used to preserve your User ID status.

.01 The following are the major errors associated with electronic filing:

.01 The specifications contained in this part of the revenue procedure define the required format and content of the records to be included in the electronic/magnetic file.

.02 An external label must appear on each tape cartridge and diskette submitted. Notice 1027 details what information must be on the label. The diskettes used must be MS/DOS compatible.

.01 In most instances, IRS/ECC-MTB can process tape cartridges that meet the following specifications:

.02 The tape cartridge records defined in this revenue procedure may be blocked subject to the following:

.03 Tape cartridges may be labeled or unlabeled.

.04 For the purposes of this revenue procedure, the following must be used:

Tape Mark:

.01 This record is used to identify the employer, the employee, number of allowances, and other information that is reported on the paper Form W-4.

.02 ALL RECORDS MUST BE A FIXED LENGTH OF 350 POSITIONS.

.03 Do not begin any record at the end of a block or diskette and continue the same record into the next block or diskette.