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CCH® PAYROLL — 10/02/12

IRS updates specifications for filing Form 1042-S

The IRS has updated the specifications for the electronic filing of Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. The new guidance includes numerous editorial changes from earlier guidance, and reflects changes to the relevant tax law. Penalties associated with filing of information returns have increased significantly. The Filing Information Returns Electronically (FIRE) system has a separate log-on address for testing, and 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. Rev. Proc. 2050, IRB 2011-38, 628, IRB 2011-44, October 31, 2011, is superseded.

Changes to note

Editorial changes have been made throughout the publication. The IRS encourages users to read the publication carefully. In addition, the following changes have been made:

• "Nature of Changes-Current Year" has been changed to "What's New for Tax Year 2012."
• The tax year must be updated with the four-digit reporting year (2011 to 2012), unless reporting prior year data.
• Form 4419, Application for Filing Information Returns Electronically (FIRE), must be submitted at least 45 days before the due date of the return(s) to allow IRS the minimum amount of time necessary to process and respond to applications.
• Income code 20 "earnings as an Artist or Athlete" has been deleted.
• There are two new income codes. Use income code 42 for earnings as an artist or athlete if there is no central withholding agreement. Use income code 43 for earnings as an artist or athlete if there is a central withholding agreement.
• Added a Province Code chart in the Recipient "Q" Record, positions 336-337. (Rev. Proc. 2012-36, IRB 2012-39, 374, September 24, 2012.)

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