2006 CHANGES TO TAX FORMS

1. 2006 CHANGESTOTAX FORMS

2. What’s Changedfor 2006??? Form W-2 Form W-2c Form 4852 Form 941 Form 944 Form 940

3. 2006 Form W-2 Changes • Box e — New Suffix Field • Box 12 — New Codes AA and BB • Back of Copy 2 — Employee Instructions • Data Entry Reminder — Decimal Point and Cents are Required

7. Form W-2c Changes • Revised — January 2006 • Box c — SSN Corrections — ADDED • Box e — Suffix Field — ADDED • Magnetic Media Filing — ELIMINATED • Online Filing — Available on SSA Website

9. Form W-3c Changes • Revised — January 2006 • Box c — Deleted “Section 218” Checkbox • Box c — Added “944/944-SS” Checkbox

11. Form 4852 Changes • Revised in December 2005. • Used for Missing or Incorrect Form W-2 or Form 1099-R. • Added Checkboxes for Form ID. • W-2 Filers Should Review Next Year’s Social Security Statement.

13. Form 941 Changes • Title Change—“QUARTERLY” • Lines 7f & 7g—“(attach Form 941c)” • Line 12—Credit Card Payments • Caution—BOTH Pages Must Be Completed. • Line 16—Added “or Stopped Paying Wages.” • Alternative Signature [R. P. 2005-39]

16. NEW Form 944 • ANNUAL Employment Tax Return • Scannable • Small Employers [< = $1,000 in TOTAL Tax] • Notified by IRS • EXCEPTIONS [Call 1-800-829-0115] • E-file • Expected Liability EXCEEDS $1,000 • Deposit Rules Apply • Credit Card Payments

19. Changes to Form 940“Plain & Simple” • Completely Redesigned for 2006 • Plain Language • Form 940, Part II — DELETED • Exempt Payments — Checkboxes • Schedule A — MultiState/Credit Reduction • New Payment Voucher • Form 940-EZ Discontinued

20. The new Form 940 for 2006 –“Plain & Simple”

21. The new Form 940 for 2006 –“Plain & Simple” • New check boxes in top right corner • No more A, B, C, questions • Will promote accuracy, reduce unnecessary correspondence

22. The new Form 940 for 2006 –“Plain & Simple” • No more hand-written explanations of exempt payments required • Check boxes capture exempt payments

23. The new Form 940 for 2006 –“Plain & Simple” • New section for computing adjustments • Replaced old Part II, lines 1-6 with new Part 3 (lines 9, 10 & 11)

24. The new Form 940 for 2006 –“Plain & Simple” • New Schedule A • Part 1 for multi-state employers • Simplifies the process - Just check the boxes to tell us where you were required to pay state unemployment tax. • Part 2 for credit reduction information • Will simplify computation, increase processing accuracy, and reduce unnecessary taxpayer correspondence.

25. The new Form 940 for 2006 –Schedule A - “Plain & Simple”

26. The new Form 940 for 2006 –“Plain & Simple” • Form 940-V Payment Voucher removed from form • Less likelihood of being detached • Will expedite processing, prevent unnecessary correspondence

27. Next Steps • Completed design phase • On track for 2006 release of new Form • Working with software developers to ensure consistent format • Processing of new Form 940 begins in January, 2007

28. 2006 Changes to Forms 1098/1099 • Form 1098-C • 4 Boxes Added • Increased to Full Page • Form 1098-T [R.P. 2005-50] • Change Accounting method (Paid vs. Billed) • Form 1099-R • Codes “V” & “W” Added (Roth Distributions) • NO NEW FORMS for 2006 • Magnetic Media [Pub. 1220] • 2006—No Diskette • 2008—No Tape

29. PROPOSED ChangestoTaxForms

30. 2007 Form W-2 • PROBLEM — Employee’s SSN is Visible in Window Envelopes • PROPOSAL — Move SSN to Box a. Relocate Box a. • New Problems??? • COMMENTS — Send Comments to: *taxforms@irs.gov. [Subject Line = “Forms Comment”]

32. 94X PROJECT • Office of Taxpayer Burden Reduction • 2008 Target • CURRENT — Adjustments [941c] • PROPOSED — Amendment [941X] • COMMENTS — Send Comments to: *taxforms@irs.gov. [Subject Line = “Forms Comment”]

33. QUESTIONS ??? Send comments to: Gerald.P.Fournier@irs.gov