Magnetic media reporting and electronic filing requirements.

The Social Security Administration (SSA) has announced that Magnetic Media Reporting and Electronic Filing (MMREF) is now mandatory for 2001 tax-year submissions. Employers generally must use magnetic or electronic media if they file 250 or more W-2s for calendar-year 2001. MMREF-1 is for wage reporting; MMREF-2 is for corrections to previously submitted wage reports. Rev. Proc. 2001-26 provides more specific guidance.

Online Wage Reporting Service (OWRS)

OWRS is an online wage-reporting service that can be used by anyone with Internet access to upload wage information to the SSA over the Internet. Those who use this format must register with the SSA for a personal identification number (PIN).

OWRS can:

* Upload MMREF-1 files;

* Check the status of magnetic media or electronic submission;

* Leave a mail message;

* View and print the OWRS handbook; and

* Confirm receipt of a resubmission notice.

OWRS can be accessed:

* Monday through Friday, 6:00 a.m. to 1:00 a.m. EST;

* Saturday, 6:00 a.m. to 11:00 p.m. EST; and

* Sunday, 8:00 a.m. to 8:00 p.m. EST

On accessing the Internet at www.ssa.gov/employer, employers first select employer services online, and then online wage reporting service. Two filing options have been eliminated: Form W-2 wage reports filed using an value-added network and the dial-up networking option are no longer available. All access to OWRS is now through the Internet.

Advantages of OWRS

OWRS has several benefits:

* An additional month to submit wage reports, until April 1, 2002;

* More time to spot errors before submission;

* Electronic confirmation of receipt (W-3);

* Opportunity to test wage-report accuracy before submission; and

* Ability to track status of wage reporting.

Magnetic Media Filing

Employers may submit W-2s on magnetic media electronically. The SSA accepts the following magnetic media for W-2 reporting:

* 3 1/2-inch diskette;

* 1/2-inch magnetic tape;

* 3480/3480E cartridges; and

* 3490/3490E cartridges.

The requirements for businesses choosing to prepare and file wage reports on magnetic media are found in the SSA's Publication MMREF-1, Magnetic Media Reporting and Electronic Filing for Tax Years 2001, Submitting Annual W-2 Copy A Information to the SSA. Employers may obtain this information via the Internet or by calling the SSA at 1-800-772-6270.

AcccuWage Test Software

The SSA has announced its free test software (AccuWage) is now available to download. This software checks the MMREF-formatted Form W-2 files for over 200 different errors. The employer has the opportunity to check its files and correct errors prior to submission. Employers can access AccuWage through OWRS.

Registration--Obtaining a PIN/Password

Employers who use the SSA MMREF program must register to obtain a PIN and password prior to submitting their information. They can obtain a PIN/password by calling 1-800-772-6270 Monday through Friday 7:00 a.m. to 7:00 p.m. EST or through the Internet site at www.ssa.gov/employer.

To obtain a PIN, employers must provide their:

1. EIN of company (third party or employer submitter);

2. Social Security number;

3. Name;

4. Date of birth; and

5. Telephone number and e-mail address.

Additional information to be provided includes mailing address, company name, telephone number and address.

After matching the individual's Social Security number, date of birth and verifying that he works for the company that will submit the file, a PIN is issued immediately. The password will be mailed within 10-14 days.

Request for Waiver

The IRS may waive the filing requirement on a show of hardship. To request a waiver, an employer must apply 45 days before the due date of the report, using IRS Form 8508, Request for a Waiver From Filing Information Return on Magnetic Media. Form 8508 can be obtained by contacting the Service at 1-800-829-3676 or on the Internet at www.irs.gov/prod/forms_pub/ forms.html.

Conclusion

The Filing deadline for magnetic media is Feb. 28, 2002. For files transmitted via OWRS or electronic data transfer, the date is April 1, 2002. Employers or preparers can request an extension prior to the due date by using IRS Form 8809, Request for Extension of Time to File Information Returns.

Editor's note: Mark Ely is former chair of the AICPA Relations with the IRS Committee. Deborah J. Pflieger is the current chair. Ms. Barners, Ms. Hyde and Messrs. DeGeorgio, VanDeveer and Goldstein are members of that committee.

FROM NANCY HYDE, PRESIDENT, O C & H P.C., OKLAHOMA CITY, OK