IRS issues guidelines on substitute tax forms in general

The IRS has issued general requirements and conditions for the development, printing, and approval of all substitute tax forms to be acceptable for filing in lieu of official IRS-produced and distributed forms. The IRS accepts quality substitute tax forms that are consistent with the official forms and that do not have an adverse impact on processing. The IRS Substitute Forms Program administers the formal acceptance and processing of these forms nationwide. While the program deals primarily with paper documents, it also interfaces with other processing and filing media, such as electronic filing. Only substitute forms conforming with these requirements will be accepted.

The guidance covers the following forms: (1) tax returns and their related forms and schedules; (2) worksheets as they appear in instruction packages; (3) applications for permission to file returns electronically and forms used as required documentation for electronically filed returns; (4) powers of attorney; (5) over-the-counter estimated tax payment vouchers; and (6) forms and schedules relating to partnerships, exempt organizations, and employee plans.
The guidance does not cover a number of forms, including Forms W-2, W-2c, W-3, W-3c, 941 and Schedule B, 1040-ES (OCR), 1041-ES (OCR), 1096, 1098 series, 1099 series, W-2G and 1042-S. It also does not cover requests for information or documentation initiated by the IRS, forms used internally by the IRS, state tax forms, forms developed by other agencies and general and specific instructions.
What’s new
The following changes have been made since the last revision.

• Tax deductions and credits have been extended for tax year 2012. The following tax deductions and credits have been extended for tax year 2012 by the American Taxpayer Relief Act of 2012, P.L. 112-240: The election to deduct state and local sales taxes instead of state and local income taxes, Mortgage insurance premium deduction, The deduction for certain domestic production activities in Puerto Rico, Energy efficient appliance credit, Credit for employer differential wage payments, Credit for increasing research activities, Empowerment zone credit, Indian employment credit, Biodiesel and renewable diesel fuels credit
• Qualified disability trust. For 2012, qualified disability trusts can claim an exemption of up to $3,800. The exemption is no longer phased out.
• Bankruptcy estate filing threshold. For tax years beginning in 2012, the requirement to file a return for a bankruptcy estate applies only if gross income is at least $9,750.
• Schedule K-1 (Form 1065). On the Schedule K-1 (Form 1065), we added new item 12 for the partnership to indicate whether the partner is a retirement plan (IRA/SEP/Keogh/etc.).
• Principal Business Activity (PBA) Codes. In the instructions, the list of Principal Business Activity (PBA) Codes have been revised.
• No separate payment card reporting requirements. Gross receipts received via payment card (credit and debit cards) and third party network payments are not separately reported on Form 1065 and Form 1120S.
• Partners that are foreign governments under Code Sec. 892. On page 3 of the form, we added line 20 to Schedule B, asking the filer to enter the number of partners that are foreign governments under Code sec. 892.
• Minor editorial changes were made as needed. (Rev. Proc. 2013-17, IRB 2013-11, 612, March 11, 2013.)