The April 26, 2016 IRS webinar says
The apostrophe is not allowed in AIR.
• However the escaped apostrophe (&apos) is allowed except in an
Individual’s name.
• For example, if a record has a last name data field containing an apostrophe, such
as “O’Malley”, the transmission cannot include the apostrophe or the escaped
apostrophe characters. The apostrophe must be stripped and the last name data
must be entered as “OMALLEY”. The transmission will be rejected, if the
apostrophe is used.
