- Where paper goes and what Code and Edit will not do
- Only Copy A counts; the 1042-T that disappears
- The e-file mandate as the IRS states it, and the religious exemption
- Dummying: when the IRS re-keys your form
- Your EIN: an SSN or ITIN is circled out
- The recipient TIN deletion rule
- Income codes, the $1 floor, chapter, and back-computed boxes
- New codes for 2026 processing and the Russia treaty line
- Amended 1042-S and the QI box 7d rule
- Foreign address formatting rules
- Questions people ask
Where paper goes and what Code and Edit will not do
Paper Forms 1042-T and 1042-S are filed at Ogden only; paper misfiled at another campus is forwarded there daily (IRM 3.21.111.1.1(3) Note, Jan. 1, 2024). Form 1042-T posts to the Payor Master File, MFT 88; Form 1042-S posts to the Information Returns Master File, MFT 12 (IRM 3.21.111.1.1(4)-(5), Jan. 1, 2024).
IRM 3.21.111.1.1(3)-(5) (Jan. 1, 2024); 3.21.111.7(14); 3.21.111.8(2)-(4); 3.21.111.6(8)-(10) (Jan. 10, 2024); 3.21.111.1(3)-(4).
Editors are told to "Take taxpayer intent into consideration" and to refer anything the manual does not cover to a lead (IRM 3.21.111.2, Mar. 2, 2023). Validity, math and consistency checking happen later, in the Chapter Three and Chapter Four Withholding database (IRM 3.21.111.1(4), Jan. 1, 2024). A paper 1042-S is rarely "UNPROCESSABLE" (Exhibit 3.21.111-7); it is transcribed with gaps and left for the database to catch.
"Document Perfection is not responsible for the mathematical verification of the return or for checking the validity of the documents being processed" (IRM 3.21.111.1(3), Jan. 1, 2024). Code and Edit fixes what it can read and passes the rest on; almost every field instruction ends "continue processing."
A received date that was never stamped is reconstructed from the earliest legible postmark, then the SCAMPS date, then signature dates, then the DLN Julian date minus 10. For certified mail without a postmark the examiner uses the acceptance date on an attached USPS Track and Confirm record; if none is attached, "no action is required" (IRM 3.21.111.7.1.2(3)-(4), Sept. 8, 2025). A payer filing paper near the deadline should staple the tracking printout to the 1042-T. Signatures are never questioned: "Do not question any signature on the return" (IRM 3.21.111.7.1.16, Jan. 10, 2024); a note that follows is redacted.
Only Copy A counts; the 1042-T that disappears
Only Copy A of Form 1042-S is processed. If Copies B, C, D or E arrive with Copy A, the examiner deletes them "by lining through each copy"; if they arrive alone, "If only Copy B, C, D, and/or E, is received, do not process," and they are destroyed as classified waste (IRM 3.21.111.8(2)-(4), Jan. 1, 2024). A payer who sends recipient copies instead of Copy A has filed nothing. The transmittal has the same fate in reverse.
"DO NOT process any Form 1042-T filed without corresponding Form(s) 1042-S Copy A. Form 1042-T will be destroyed, per local procedures" (IRM 3.21.111.7(14), Jan. 1, 2024). No letter is generated. A payer who mailed the transmittal with recipient copies, or with nothing behind it, has filed nothing and is not told.
The opposite case is handled gently: Copy A received without any 1042-T is not rejected; the IRS builds a "dummy" 1042-T for it (IRM 3.21.111.8(3), Jan. 1, 2024).
One more copy rule matters to payers who field recipient questions. When a recipient mails a 1042-S copy (Copy B through E) to Ogden "requesting a refund of taxes withheld," the form is referred to a lead and returned to the recipient with instructions to file Form 1040-NR with the Austin campus (IRM 3.21.111.8(2) Note, Jan. 1, 2024). Ogden does not issue refunds from a 1042-S; the recipient's only route is a return.
The e-file mandate as the IRS states it, and the religious exemption
The manual's own statement of who may not file on paper: "Withholding agents who are required to file 10 or more Information Returns, partnerships with over 100 partners, and all financial institutions (regardless of number of forms filed) must file electronically" (IRM 3.21.111.7(4), Jan. 1, 2024; repeated at 3.21.111.8(1)). Read the other way, paper is tolerated only for a filer with fewer than 10 information returns and 100 partners or fewer that is not a financial institution. Nothing in this manual says what the examiner does with paper from someone who should have e-filed; there is no penalty coding and no reject. The paper is processed, and whatever follows comes from the penalty side of the IRS.
The Sept. 8, 2025 revision adds the religious exemption from e-filing under Notice 2024-18. The filer files Form 8508 and writes "Religious Exemption" at the top of the paper forms. Code and Edit notates the return "RE-TC016" and pulls it; a research clerk checks command codes ENMOD and BMFOLE for the "RLG-EX IND" indicator, and if it is blank inputs a TC 016 setting RLG-EX to "1", after which the return is processed normally (IRM 3.21.111.5, Sept. 8, 2025). Nothing in the section says the paper is rejected if the indicator is absent; it is set and processing continues.
Dummying: when the IRS re-keys your form
Forms "filed on a form, or in a format, that does not exactly match the official IRS form" are re-keyed onto a blank current-year form, which the manual calls dummying. A consolidated listing is split so the examiner can "dummy a Form 1042-S for each Recipient," and two 1042-S on one sheet are photocopied so each has its own DLN (IRM 3.21.111.6(8)-(10), Jan. 10, 2024). A prior-year form revision is edited to current-year line numbering, or dummied if that fails (IRM 3.21.111.8(6), Jan. 1, 2024).
The transmittal is repaired too. The 1042-T must match the attached 1042-S on five checkboxes (Line 1a to Box 3, 1b to the Amended box, 1c to Box 15, 1e to Box 7c, 1f to Box 7d) and there is one 1042-T per type of 1042-S (IRM 3.21.111.7.1(2), Sept. 8, 2025; 3.21.111.7(1)-(3), Jan. 1, 2024). If chapter 3 and chapter 4 forms sit behind one 1042-T, the examiner separates them and the IRS creates a second 1042-T itself (IRM 3.21.111.7.1.3, Jan. 1, 2024). The Line 1d count is physically recounted and overwritten, and blank totals are computed from the attached forms (IRM 3.21.111.7.1.10, Jan. 1, 2021; 3.21.111.7.1.13, .14). Paper also tolerates what an electronic file would reject: a Unique Form Identifier with fewer than ten digits, blank or non-numeric, is left alone and the examiner is told to "continue processing" (IRM 3.21.111.8.1.4, Jan. 1, 2019); cents on paper are simply truncated to dollars (IRM 3.21.111.8(5), Jan. 1, 2024).
Your EIN: an SSN or ITIN is circled out
The withholding agent's EIN on the 1042-T and in Box 12a must be nine numeric digits; all zeros or all nines is invalid. The manual's instruction covers the case a sole proprietor will recognize: if the EIN is "missing, invalid, incomplete or illegible, or Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) is present," the examiner circles it out, researches the 1042-S Box 12a and IDRS for a valid EIN, edits it in if found, and if not found is told to "continue processing" (IRM 3.21.111.7.1.5, Sept. 8, 2025; 3.21.111.8.1.23, Sept. 8, 2025). A withholding agent reporting under an SSN will have that number removed and replaced by whatever IDRS research finds, or transcribed with no EIN at all. A redacted row follows in both sections, and the QI-EIN range is redacted (IRM 3.21.111.8.1.23(1)).
Name lines are three lines of 40 characters, titles such as Mr., Dr. and Rev. are deleted, and the name is the one "as established when filing EIN, QI-EIN, WP-EIN, or WT-EIN," meaning the business master file name of record (IRM 3.21.111.7.1.6, Jan. 1, 2020; 3.21.111.6(7), Jan. 10, 2024). A blank agent country code in Box 12f with a domestic address is edited to "US" (IRM 3.21.111.8.1.28, Sept. 8, 2025). GIINs and foreign TINs are never edited.
The recipient TIN deletion rule
The recipient's U.S. TIN in Box 13e is nine positions, "may or may not be present," numeric only, and "can be a Social Security Number (SSN) or an IRS Individual Taxpayer Identification Number (ITIN)" (IRM 3.21.111.8.1.35, Nov. 21, 2024); the description omits EINs, and the manual does not explain why. Then come the two deletions.
"The Recipient's TIN can't be the same as the Withholding Agent's EIN, Box 12a. If the same number is present in box 13e, delete the entry. If the entry is more or less than nine digits, or repeating digits, delete the entry" (IRM 3.21.111.8.1.35, Nov. 21, 2024). No research is done; the record is transcribed with no recipient TIN.
| Test at Code and Edit | What the examiner does | Cite |
|---|---|---|
| Box 13e equals the withholding agent's EIN in Box 12a | Deletes the entry. The form posts with no recipient TIN. | IRM 3.21.111.8.1.35 (Nov. 21, 2024) |
| Entry is more or fewer than nine digits | Deletes the entry. | IRM 3.21.111.8.1.35 |
| Repeating digits (a placeholder such as all nines or all ones) | Deletes the entry. | IRM 3.21.111.8.1.35 |
| Non-numeric characters | The field is numeric only; the manual gives no separate instruction, and no research is done at this stage. | IRM 3.21.111.8.1.35 |
| A well-formed TIN that belongs to someone else | Not tested here. No validity research, name control derivation or DM-1 check is done on Box 13e. | IRM 3.21.111.1(3) (Jan. 1, 2024) |
Three things follow for a payer. A placeholder TIN buys nothing; the record posts as a no-TIN record would. A slip that copies your own EIN into the recipient box is silently removed, so a form you believe carries a TIN does not. And a valid-looking TIN that is simply wrong sails through untouched; no one at Ogden checks it against a name. Missing recipient status codes in Boxes 13f and 13g get "limited research" from the name line (a corporation name to 15, an individual to 16), otherwise processing continues (IRM 3.21.111.8.1.36, Jan. 1, 2024); status code 21, Unknown Recipient, must carry "Unknown" as Name Line 1 (Exhibit 3.21.111-3 Note).
Income codes, the $1 floor, chapter, and back-computed boxes
Box 1 is two digits and a single digit gets a leading zero (IRM 3.21.111.8.1.7, Sept. 8, 2025). It is also the only field in the manual that carries an instruction to correspond, and the instruction is immediately switched off.
"Correspond if the withholding agent is reporting more than one income code on Form 1042-S. If contact is not possible or there is no reply, delete all income codes but the first." Then the note that governs: "Follow no-reply procedures until further notice" (IRM 3.21.111.8.1.7(2)-(3), Sept. 8, 2025). In practice the IRS does not write; it keeps the first code and drops the rest.
No letter number is given anywhere in the manual. One exception: when a breakdown statement is attached, the examiner photocopies the form once per income code and adjusts the 1042-T count (IRM 3.21.111.8.1.7(2)-(3)). Without a breakdown, assume the second code no longer exists in IRS records.
Gross income in Box 2 is whole dollars, and the floor is $1: "If the gross income is less than $1.00 but more than zero, edit 1. If the gross income is negative, X the entry, and edit 1. If ... omitted, take no action" (IRM 3.21.111.8.1.8, Jan. 1, 2021). A $0.40 payment becomes $1 and a negative amount becomes $1, which is a mismatch against your own records if you ever reconcile to an IRS transcript.
IRM 3.21.111.8.1.9 (Jan. 10, 2024). The same Box 4b test is applied when both chapter boxes are checked.
Rates are keyed as four positions, so 15% is "1500". "The Chapter 4 Tax Rate is 30 percent and the tax rate under 1446(f) is 10%. If another rate is entered, continue processing" (IRM 3.21.111.8.1.12, Nov. 21, 2024). Missing amounts are back-computed rather than questioned: a blank Box 5 or Box 6 is filled from the other and Box 2 (IRM 3.21.111.8.1.14, Sept. 8, 2025), and a blank Box 10 is computed as Box 7a plus Box 8 minus Box 9 (IRM 3.21.111.8.1.21, Sept. 8, 2025).
New codes for 2026 processing and the Russia treaty line
The Sept. 8, 2025 revision extends both code tables (full lists at IRM 3.21.111.8.1.7 and Exhibit 3.21.111-3); only the additions are listed here.
| Field | Code | Meaning | Cite |
|---|---|---|---|
| Income code (Box 1) | 59 | Consent fees | IRM 3.21.111.8.1.7 (Sept. 8, 2025) |
| Income code (Box 1) | 60 | Loan syndication fees | IRM 3.21.111.8.1.7 (Sept. 8, 2025) |
| Income code (Box 1) | 61 | Settlement payments | IRM 3.21.111.8.1.7 (Sept. 8, 2025) |
| Chapter 3 status code (Box 13f) | 39 | Disclosing QI | Exhibit 3.21.111-3 (Sept. 8, 2025) |
| Chapter 3 status code (Box 13f) | 40 | Partnership QDD | Exhibit 3.21.111-3 (Sept. 8, 2025) |
| Chapter 3 status code (Box 13f) | 41 | U.S. government or tax-exempt entity other than 501(c) | Exhibit 3.21.111-3 (Sept. 8, 2025) |
The treaty rate exhibits (3.21.111-5 for all income codes and 3.21.111-6 for income code 50) list the valid rates per country code, for example Canada 0, 5, 10, 15 and 30, and "All Other Countries" at 0 and 30; these are the tables the withholding database later validates against. The Russia line reads: "Treaty has been suspended for taxes withheld at the source as of August 16, 2024 ... Use 0 during the suspension" (Exhibit 3.21.111-5). A payer still applying a Russia treaty rate on a paper 1042-S is reporting a rate the IRS's own table no longer lists.
Amended 1042-S and the QI box 7d rule
An amended paper 1042-S is recognized by the Amended box, which the examiner edits to "1", and by an Amendment Number of 1 to 9, sequential per amendment (IRM 3.21.111.8.1.5-.6, Jan. 1, 2019). Amended and original forms cannot share a 1042-T, and Line 1b on the transmittal must match (IRM 3.21.111.7(3); 3.21.111.7.1(2)). The form is transcribed with the amendment indicator; what it does to the original is decided downstream. The manual contains no procedure for a withholding agent's letter asking to void or correct forms.
New in the Sept. 8, 2025 revision is Box 7d and its transmittal twin, Line 1f, for a QI, WP or WT "revising Form 1042-S to a Specific Recipient," that is, reducing a pooled 1042-S by amounts now reported to named recipients. If Box 7d is checked on any 1042-S but Line 1f is not, the examiner checks Line 1f and edits "1"; a dummy 1042-T built by the IRS also gets Line 1f checked (IRM 3.21.111.7.1.12, Sept. 8, 2025; 3.21.111.8.1.18, Sept. 8, 2025).
One housekeeping point: a sticky note from another IRS function reading "TP requests penalties be waived" is not taxpayer correspondence (IRM 3.21.111.3.6, Jan. 1, 2024). A penalty request has to come from you, in writing, to the penalty function, not ride along with the paper forms.
Foreign address formatting rules
The same address perfection rules apply to the agent's address in Boxes 12h and 12i and the recipient's in Boxes 13c and 13d (IRM 3.21.111.7.1.7, Jan. 1, 2023; 3.21.111.8.1.34, Nov. 21, 2024). A domestic address that shows both a street and a P.O. Box has the P.O. Box circled out; two street addresses lose the first one. A Canadian address needs a province code. Foreign country codes are edited in the form "/XX/$". Australia must have a postal code, and the examiner enters 0000 if it cannot be determined. For Kuwait, Gibraltar, Hong Kong, Luxembourg, Malta, Mexico, Monaco, San Marino, Singapore, Panama (City) and Vatican City, the country name goes in the city field.
The recipient country code in Box 13b changed on Sept. 8, 2025 to stop editors defaulting to the United States: "If left blank or incorrect code is used, do not use US to correct," and "No editing is required" (IRM 3.21.111.8.1.33, Sept. 8, 2025). As with the TIN, nothing here fixes a wrong country, and nothing tells you it was wrong.
Questions people ask
We mailed the 1042-T with the recipient copies by mistake. Will the IRS write to us?
No. The manual says a 1042-T without Copy A "will be destroyed, per local procedures," and the copies are destroyed as classified waste (IRM 3.21.111.7(14); 3.21.111.8(4), Jan. 1, 2024). No correspondence is generated. Re-file Copy A with a new 1042-T.
Our foreign vendor wants a refund of the 30 percent and mailed her 1042-S to the IRS. What happens?
A recipient copy sent to Ogden "requesting a refund of taxes withheld" is returned to her with instructions to file Form 1040-NR with the Austin campus (IRM 3.21.111.8(2) Note, Jan. 1, 2024). The 1042-S is her evidence of withholding, not a claim.
We used 999-99-9999 for recipients who never gave us a TIN. Does that help?
Not at this stage. Repeating digits in Box 13e are deleted by the examiner without research (IRM 3.21.111.8.1.35, Nov. 21, 2024), so the record posts as no-TIN, the same as if you had left the box blank. The manual does not say what happens downstream to a no-TIN record.
We are a sole proprietor withholding agent and filed under our SSN. Is that a problem?
The manual treats an SSN or ITIN in the agent EIN field as something to circle out and replace by IDRS research; if research finds nothing, the examiner continues processing with the field blank (IRM 3.21.111.7.1.5; 3.21.111.8.1.23, Sept. 8, 2025). Get an EIN and use it.
We put two income codes on one paper 1042-S for the same recipient.
The instruction to correspond is overridden by "Follow no-reply procedures until further notice," so the examiner keeps the first code and deletes the rest (IRM 3.21.111.8.1.7(2)-(3), Sept. 8, 2025). Only an attached breakdown statement saves the second code. File one form per income code.