User Bulletin 2881: Electronic Filing 1040 Processing 2007 UltraTax/1040-US Version January 11, 2008

Transcription

1 User Bulletin 2881: Electronic Filing 1040 Processing 2007 UltraTax/1040-US Version January 11, 2008 PURPOSE This user bulletin provides UltraTax/1040-US users with an overview of the processing steps for the UltraTax CS Electronic Filing utility. All processing steps explained in this user bulletin are covered in full detail in the UltraTax CS help. To access the UltraTax CS Electronic Filing utility help, choose Help / UltraTax CS Help Topics, click the Index button, and enter Electronic filing. ELECTRONIC FILING PROCESSING PROCEDURES 1. Defining the electronic filing configuration a. In the Setup / System Configuration / Electronic Filing tab, enter the six-digit Electronic Filing Identification Number (EFIN) assigned to you by the IRS in the EFIN field. Note: If you are filing electronically using multiple EFINs, click the Several EFINs are being used option. Enter the applicable six-digit EFIN for each individual preparer in the Setup / System Configuration / Preparers tab. b. In the Setup / System Configuration / Electronic Filing tab, enter the range of numbers (between 10 and 99999) to be used when UltraTax CS assigns Declaration Control Numbers (DCN) to electronically filed 1040 tax returns and federal extensions in the Serial # start and end fields in the DCN (Declaration Control Number) group box. Note: If you are creating electronically filed 1040 tax returns and federal extensions on multiple computers with UltraTax CS installed and using one EFIN, enter a unique range of serial numbers on each stand-alone computer. This is especially important when UltraTax CS is installed locally but the client data is accessed from a network location or a laptop is being used between the office and home. Returns with duplicate DCNs will be rejected by the IRS. c. UltraTax CS normally uses the licensed firm information as the default for the Electronic Return Originator (ERO) within the electronically filed return. To designate alternate ERO information, from the Setup / System Configuration / Electronic Filing tab, click the ERO button to open the Electronic Return Originator (ERO) dialog, and click the Use alternate ERO information option if you want alternate information to be used with the electronically filed return. If you click this option, complete all of the applicable fields in the Use alternate ERO information group box. If you do not want to use alternate ERO information, no action is necessary on your part. d. If you completed Republic Bank s Tax Refund Solutions application and want to use its bank products, choose Setup / 1040 Individual / Bank Products, and mark the Use

2 Tax Refunds Solutions (Republic Bank) bank products checkbox. Note that you will not be able to enter data in Screen RALRBT in the E Filing folder until this checkbox is marked. After you complete these one-time setup steps, you can use UltraTax CS to create and transmit returns and retrieve acknowledgements upon successful login to CS Connect. Refer to User Bulletin Electronic Filing Setup Procedures for more information on setup issues and other information that you may need to address prior to electronically filing returns with UltraTax CS. Note: If you are licensed for both the UltraTax CS Electronic Filing utility and a thirdparty electronic filing software package, choose UltraTax CS Help Topics from the Help menu, click the Index tab, enter Electronic filing, and click transmitting returns for. 2. Preparing the return for electronic filing a. Complete the tax return data entry. b. In Screen ELF in the federal E Filing folder, enter X in the File this return electronically field. When this field is marked, UltraTax CS automatically assigns a DCN to the tax return in the Declaration control number field in Screen ELF to be included in the electronic file. If the Declaration control number field does not automatically update with a DCN number, verify that you have completed all the steps as described above in the Defining the electronic filing configuration section. Important! When the federal 1040 electronic file is created, UltraTax CS will automatically create the state electronic file(s). A For Your Information (FYI) state diagnostic is present to indicate when the state electronic file(s) will be created. Thirty-seven states are electronically filed by piggybacking onto a federal electronic return. To increase the types of returns that can be filed electronically, most of those piggyback states have adopted state-only filing. State-only electronic files are created without the federal return component. This option eliminates the IRS restriction against filing multiple piggyback states, and also allows the state file to be sent at a different time than the federal file. The latter is useful when the federal return has been accepted, but the state return must be re-transmitted due to errors. Also, you may create a state-only return without creating a federal return for those instances where a client is not required to file a federal return, but a state return is to be filed electronically. State-only electronic filing is not available for Arkansas (part-year residents and nonresidents) or Hawaii. For more information on 1040 state-only electronic filing information, choose UltraTax CS Help Topics from the Help menu, click the Index button, enter Electronic filing, and click state general information for. If you prefer to file a paper return for the state and want to suppress the creation of the state electronic file, the following options are available. From the Setup / System Configuration / Electronic Filing tab, click the States button. In this dialog, all UltraTax/1040 states for which you are licensed are marked for state electronic filing by default. You can globally suppress the creation of state electronic files for all returns by clearing the checkbox adjacent to the specific state postal code. From the Setup menu, choose 1040 Individual, and click the New Client Options button. Mark the Suppress state electronic file(s) when filing federal return/extension

3 electronically (Screen ELF) checkbox to suppress the creation of all state electronic files for all new clients subsequently added in UltraTax/1040. This option also applies to clients whose data was converted from another tax program. In Screen ELF in the federal E Filing folder, enter X in the Suppress the creation of: State electronic file(s) when only filing the federal return/extension electronically field. This will suppress the creation of all state electronic files for that client. In the applicable state s Screen Info in the state General folder, enter X in the Suppress state electronic file when filing federal return electronically field to suppress the creation of a specific state electronic file for that client. If you prefer to file an electronic return for the state and suppress the creation of the federal electronic file, enter X in the Suppress creation of: Federal electronic file when only filing a state return/extension electronically field in Screen ELF in the E Filing folder. This will allow the creation of state electronic files for both independent states and states that support state-only electronic filing. c. Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, is required when paper documents must be sent to the IRS. Only the specified forms or supporting documents listed on Form 8453 can be submitted using the form. Form 8453 and required attachments must be sent to the IRS submission processing center within three (3) business days after the authorized IRS e-file provider receives the accepted acknowledgment. A Personal Identification Number (PIN) signature is still required to sign the electronically filed return when using Form d. The Internal Revenue Service offers two Personal Identification Number (PIN) electronic signature options: Self-Select and Practitioner PIN programs. Either one must be used for signing an electronically filed return. The Practitioner PIN program places the burden of verifying the identity of the taxpayer (and spouse, if applicable) with the ERO. In this case, the shared secret information (date[s] of birth, prioryear PIN, and prior-year AGI) used by the IRS to verify the taxpayer s identity is not required. To elect to use the Practitioner PIN program on a global basis, from the Setup / System Configuration / Electronic Filing tab, click the ERO button and mark the Practitioner PIN Program filer checkbox in the PIN Program (1040 Only) group box. The IRS allows PIN information to be program-generated with taxpayer(s) consent. To elect to have UltraTax CS automatically generate the taxpayer(s) PIN on a global basis, from the Setup / System Configuration / Electronic Filing tab, click the ERO button and mark the Automatically generate taxpayer(s) PIN checkbox in the PIN Program (1040 Only) group box. If the taxpayer(s) consent to use a programgenerated PIN, you must receive a signed Form 8879, IRS e-file Signature Authorization, from them prior to transmitting the return. If the taxpayer(s) do not consent to use the program-generated PIN, enter X in the Suppress automatic PIN generation field available in Screen PIN. To elect to have UltraTax CS automatically generate the signature date upon entry of a PIN in Screen PIN on a global basis, from the Setup / System Configuration / Electronic Filing tab, click the ERO button and mark the Automatically generate signature date checkbox. Note: When both the Automatically generate signature date and Automatically generate taxpayer(s) PIN checkboxes are marked in the ERO dialog, the signature

4 date and taxpayer(s) PINs are generated when an ERO PIN is entered in the ERO PIN field in Screen PIN. To print Form 8879, IRS e-file Authorization, and PIN filing instructions prior to completing all of the required PIN data entry information (for example, signature date, taxpayer PIN, and spouse PIN), enter X in the Print electronic filing PIN signature forms field in Screen PIN in the E Filing folder. This option is available to allow for Form 8879 to be mailed to the taxpayer(s) for a signature. To select this option for all new clients subsequently added in UltraTax/1040, and clients whose data was converted from another tax program, from the Setup menu, choose 1040 Individual, click the New Client Options button, and mark the Print electronic filing PIN signature forms (Screen PIN) checkbox. Note: UltraTax CS automatically generates diagnostics that indicate when PIN data entry is incomplete. All PIN data entry must be completed to be included in the electronic file. For detailed PIN program requirements, choose UltraTax CS Help Topics from the Help menu, click the Index button, enter Electronic filing, click entering return data for, click Overview of entering data for 1040 electronic returns, and click Entering data for clients with a PIN. The IRS rejects any returns that contain incomplete or incorrect PIN information. For both PIN options, five-digit PINs for both the taxpayer and spouse, and an elevendigit PIN for the ERO, are required. For the Self-Select PIN option, the prior-year PIN from the accepted electronically filed 2006 return or the prior-year adjusted gross income (AGI) from the originally reported return are also required for both the taxpayer and spouse. e. If a client has a balance due and chooses to pay the balance due, including amounts from the Late Filing Interest and Penalty Worksheets, through automatic electronic funds withdrawal (direct debit) from their bank account, complete the Electronic funds withdrawal for balance due returns: Requested payment date field in Screen ELF in the federal E Filing folder. Also, complete all of the primary bank information fields in Screen Info in the federal General folder. An Electronic Funds Withdrawal Form Payment Record worksheet is automatically generated by UltraTax CS with electronic payment information, including the amount and requested date of payment, for client and preparer purposes. Note: Requested payment date fields for electronic funds withdrawal are available for electronically filed federal extensions in the Extension Information section in Screen ELF. f. Review and correct any data issues indicated in the UltraTax CS diagnostics, as necessary. Failure to correct data issues could result in incorrect filing instructions. For information on preparing electronic federal 1040 extensions with the Self-Select PIN option, choose UltraTax CS Help Topics from the Help menu, click the Index button, enter Electronic filing, click creating electronic files for, click Overview of creating the 1040 electronic file and correcting errors, click Preparing a 1040 return for electronic filing, and click Preparing a 1040 federal extension for electronic filing.

5 3. Checking for electronic filing errors Open the Print Returns dialog by choosing File / Print Returns, or click the Print button in the toolbar, and mark the Create electronic file checkbox. Click the Preview (or Check E-File) button to check for errors prior to the creation of the electronic file. If the tax return fails electronic filing error checking, refer to Step 5 on correcting errors in the electronic file. 4. Creating the electronic file Open the Print Returns dialog by choosing File / Print Returns, or click the Print button in the toolbar, and mark the Create electronic file checkbox. Click the Print (or E-File) button to create the electronic file. Important! You must click the Print (or E-File) button in the Print Returns dialog for UltraTax CS to create the electronic file. Clicking the Preview button in the toolbar, choosing Preview from the File menu, or clicking the Preview (or Check E-File) button from the Print Returns dialog will not generate the electronic file. UltraTax CS checks the tax return data for electronic filing errors during the creation of the electronic file. If the tax return passes electronic filing error checking, it is then available for transmission to the IRS, which is discussed in Step 6. If the tax return fails electronic filing error checking, refer to Step 5 on correcting errors in the electronic file. 5. Correcting errors in the electronic file If there are errors in an electronic file, the UltraTax CS E-File Error Report dialog automatically displays a list of errors for the federal or state return, if applicable. For more information, choose UltraTax CS Help Topics from the Help menu, click the Index button, enter Electronic filing, and click correcting errors in the electronic return. Three buttons are available in the E-File Error Report dialog: Detail / No Detail Click the Detail button to display additional information regarding the electronic file and the highlighted error condition. This is helpful to diagnose what needs to be corrected in the return or to provide information to a Thomson Tax & Accounting Support Representative when necessary. When you click the No Detail button, this information is not visible. OK Click this button to delete the electronic files that contain errors and close the E-File Error Report dialog. Once you have corrected the errors listed in the E-File Error Report, you can repeat the steps to create the electronic file. Print Report Click this button to print a copy of the E-File Error Report. Note: If you click the Preview button in the Print Returns dialog to check for errors prior to creating the electronic file and also mark any of the Government copy, Client copy, or Preparer copy checkboxes, you will not be able to print the E-File Error Report. Those checkboxes must be cleared to print the report. 6. Selecting and transmitting clients to Thomson Tax & Accounting via CS Connect After client(s) are created, you can select and transmit returns to Thomson Tax & Accounting through CS Connect. a. Click the CS Connect button in the toolbar, or choose Utilities / CS Connect. b. In the Options tab in CS Connect, in the Purpose of this call group box, mark the Transmit returns checkbox. This checkbox is only available when electronic files are present in the Electronic Filing tab.

6 c. Click the Electronic Filing tab. d. Clients available to transmit are listed in the left pane of the Electronic Filing tab. Select the client(s) to transmit to Thomson Tax & Accounting by highlighting the desired client and clicking the Select button, or click the Select All button to select all available clients. Selecting the client(s) to transmit moves the client(s) from the left pane to the right pane. Returns for clients in the right pane are queued for transmission to Thomson Tax & Accounting. Note: In the Options tab in CS Connect, in the Purpose of this call group box, the number of files queued is indicated below the Transmit returns checkbox. e. After client(s) are queued to transmit to Thomson Tax & Accounting, click the Call Now button to transmit the returns to Thomson Tax & Accounting. Note: In the Options tab in CS Connect, in the Purpose of this call group box, the Transmit returns checkbox must be marked to transmit returns during your CS Connect session. f. After the electronic files are transmitted to Thomson Tax & Accounting, the Electronic Filing status in the Utilities / Electronic Filing / Electronic Filing Status dialog indicates Return transmitted to CS. There are no further updates to the electronic filing status until an acknowledgement (ACK) is received from the taxing authority. g. During the same connection to Thomson Tax & Accounting, if you have marked the Retrieve acknowledgements checkbox in the Options tab in the CS Connect dialog, you will also receive any acknowledgements from previously transmitted electronically filed returns that have either been accepted or rejected by the IRS or a state. Important! When the Transmit returns checkbox is marked, do not select clients for transmission if you do not intend to transmit their returns during your CS Connect session, such as when requesting per-return-pricing (PRP) authorization codes or downloading UltraTax CS updates. 7. Receiving acknowledgements via CS Connect Once clients are transmitted to Thomson Tax & Accounting, you will receive an acknowledgement (ACK) from the taxing authority. The IRS processes the returns and transmits acknowledgements to Thomson Tax & Accounting within 48 hours of receipt (state timeframes vary). The acknowledgements are then available to you through CS Connect for automatic download any time you have a CS Connect session with the Retrieve acknowledgements checkbox marked in the Options tab in the CS Connect dialog. If you are filing federal and state returns for the same client, you will receive separate acknowledgements from both the IRS and the state taxing authority. a. Click the CS Connect icon in the toolbar. b. In the Options tab of the CS Connect dialog, in the Purpose of this call group box, mark the Retrieve acknowledgements checkbox to retrieve acknowledgements during the CS Connect session, and click the Call Now button. Note: You can mark the Retrieve acknowledgements checkbox to retrieve acknowledgements during any CS Connect session.

7 c. Once you receive the acknowledgements, the Electronic Filing status in the Utilities / Electronic Filing Status dialog is updated with one of the following status events. ACK received, file accepted This status event indicates the electronic file was accepted by the taxing authority and now Form 9325, Acknowledgement and General Information for Taxpayers Who File Returns Electronically, can be printed. To print Form 9325, highlight the desired client in the list, and click the Print 9325 button. Once Form 9325 is printed, the 9325 column in the Utilities / Electronic Filing / Electronic Filing Status dialog is updated with X. You also have the ability to print a Form 9325 equivalent for all states. Important! Form 9325, Acknowledgement and General Information for Taxpayers Who File Returns Electronically, contains important information that should be provided to your electronic filing clients and should be printed twice during the electronic filing process: Print Form 9325 after transmitting the electronic file via CS Connect. Line 1 will be marked, and the firm information and location of the IRS Submission Processing Center will be listed. Print Form 9325 again after the accepted acknowledgement file is received via CS Connect. Line 1 information will remain, line 2 will be marked, and the date of acceptance and Declaration Control Number (DCN) will be listed. Form 9325 also has a Debt Indicator Code on line 4 that signifies that all or part of the refund may be offset for debt owed. There are additional boxes to indicate whether there was an accepted Personal Identification Number (PIN), and whether an Electronic Funds Withdrawal (Direct Debit) was accepted. To print Form 9325, choose Utilities / Electronic Filing, highlight the desired client in the list, and click the Print 9325 button. If you want the taxpayer s address to print left-justified on Form 9325 (the right-justified default follows the IRS form design), choose Setup / 1040 Individual / Other Return Options, and mark the Print Form 9325 taxpayer mailing address left-justified checkbox in the Return presentation group box. ACK received, file rejected This status event indicates the electronic file was rejected by the taxing authority. Select the client and click the Show Detail button to display the error code number(s) and text. The codes can also be printed by clicking the Print button in the ELF Client Detail dialog. Once corrections are made and a new electronic file is created, the client s return can be retransmitted. Bank product information is also included in the status events and can be viewed in the Bank column. There are four entries that can appear in the Bank column. The entry Pend signifies that a bank product was created but not transmitted to Republic Bank, pending receipt of an Accepted acknowledgement. For clients with information in the Bank column, highlight the specific client in the list and click the Bank Info button to visit Republic Bank s website and view the status of that client s bank product. You may have to enter login information on the bank s website.

8 Once the Accepted acknowledgement is received by Thomson Tax & Accounting, we will forward the bank product information and update the status in the Bank column to ERC (Electronic Refund Check), ERD (Electronic Refund Deposit), or RAL (Refund Anticipation Loan), indicating the type of bank product sent. You can print a list of clients by clicking the Print Basic Report or Print Detailed Report button. You can view the electronic filing status of any client(s) at any time by clicking the downward-pointing arrow next to the clock icon (Client Status button) when the client is open in UltraTax CS. You can also view the electronic filing status, along with other logged events concerning a tax return, by choosing Utilities / Reports / Client Listing, clicking the Client Status History option, and marking the Include UltraTax CS events checkbox. In addition, you can filter out clients based on the type of entity, status of the electronic file, and the timeframes of the latest electronic filing activity. 8. Viewing electronic filing reports You can view an electronic filing status report as well as see the electronic filing transmission return charges on the TIN Activity Report by doing the following. a. Click the CS Connect button and mark the Retrieve ELF/PRP reports and product news checkbox. When this checkbox is marked, the ELF/PRP Reports tab is enabled. b. Click the Call Now button to retrieve the reports. c. Click the Close button to close the Online Status dialog. d. Choose Utilities / Reports / ELF/PRP and select the Electronic Filing client status report (or other desired report), and click the View Report button in the ELF/PRP Reports dialog. The ELF/PRP Reports dialog can also be accessed from the UltraTax CS Home Page under the Status Summary by clicking the ELF/PRP reports link. Note: You can view the Home Page at any time by clicking the Home Page button in the toolbar. Processing tips The I authorize field on Form 8879, IRS e-file Signature Authorization, is to be used when the taxpayer and/or spouse gives the Electronic Return Originator (ERO) authorization to enter the Personal Identification Number (PIN). This field is automatically completed when the PIN authorization indicator field in Screen PIN is equal to code 2 (ERO entered Taxpayer PIN), 3 (ERO entered Spouse PIN), or 4 (ERO entered both PINs). The I authorize field is not automatically completed if the taxpayer and spouse (if applicable) enter their own PINs. Once you have created the electronic file and then subsequently change the tax return, you must recreate the electronic file before transmission. CS Connect will display an indicator (!) for clients whose data has changed since the creation of the electronic file. The Discourage Access feature will generate a status system warning message when you open a client for which an electronic file has been previously created. Unmarking and marking the File this return electronically field in Screen ELF causes UltraTax CS to generate a different Declaration Control Number (DCN). As a result, duplicate electronically filed returns may be created. Also, renaming client IDs for electronically filed returns may affect the ability of the UltraTax CS Electronic Filing utility to track the receipt of acknowledgement files.

9 Important! Do not rename client IDs for electronically filed returns or try to generate new DCNs unless you are instructed to do so by a Thomson Tax & Accounting Support Representative. REFUND ANTICIPATION LOANS AND OTHER BANK PRODUCTS Thomson Tax & Accounting has partnered with Republic Bank, a leading provider of bank products to tax professionals, to offer Refund Anticipation Loans (RAL) and electronic refund checks and deposits through the UltraTax CS Electronic Filing utility. For more information on these products, contact Republic Bank at (866) or visit their website at republicrefund.com for further information. To request a Republic Bank product: 1. Complete all of the steps as described above in the Defining the electronic filing configuration section. 2. In Screen RALRBT in the E Filing folder, select the desired bank product from the dropdown list for the Type of Tax Refund Solutions (Republic Bank) bank product field. 3. In Screen RALRBT, select the desired disbursement method from the drop-down list for the Disbursement method field. 4. Complete the remaining applicable fields in Screen RALRBT. Note: If the taxpayer address entered in Screen 1040 in the General folder contains a P.O. Box number, which Republic Bank does not accept, you must enter a non-p.o. Box address in the Residential address fields in Screen RALRBT. 5. If you are requesting a disbursement via direct deposit, complete all of the primary bank information fields in Screen Info in the General folder. 6. If you are requesting a disbursement to a stored value debit card, complete the Stored value card account number field in Screen RALRBT. 7. Enter photo identification information in the Identity Verification fields in Screen RALRBT. 8. If you are requesting a Refund Anticipation Loan (RAL), the taxpayer(s) must sign the Truth-In-Lending Act disclosure(s), which accompany the application. 9. Review and correct any data issues indicated in the UltraTax CS diagnostics, if necessary. Thomson Tax & Accounting recommends that you address all bank product diagnostics prior to the transmission of the electronic file to prevent unnecessary delays in the processing of the taxpayer s bank product request. When you transmit an electronic tax return to Thomson Tax & Accounting, an electronic bank product file is included. Client bank product information is displayed in the Bank column in the Utilities / Electronic Filing / Electronic Filing Status dialog. A state bank product is not generated unless you designate it in the applicable state Screen Info in the state General folder. STATE ELECTRONIC FILING INFORMATION For more information on 1040 state general electronic filing information you may need to address prior to electronically filing state returns, choose UltraTax CS Help Topics from the Help menu, click the Index button, enter Electronic filing, and click state general information for. ELECTRONIC FILING AND PRODUCT NEWS Federal and state taxing authorities may experience electronic filing processing issues, such as delayed acknowledgements or downtime for processing center hardware maintenance. Thomson

10 Tax & Accounting reports any known processing delay issues via an electronic filing bulletin in CS Connect. To access the Electronic Filing bulletins, do the following: 1. Click the CS Connect button to open the CS Connect dialog. 2. Mark the Retrieve ELF/PRP reports and product news checkbox in the Purpose of this call group box. When this checkbox is marked, the ELF/PRP Reports tab is enabled. 3. Click the Call Now button to retrieve the reports. 4. Choose Utilities / Reports / ELF/PRP, highlight Product news (or other desired report), and click the View Report button to view the report online. Tip! Electronic Filing and other product news can be accessed from the UltraTax CS Home Page under Notices by clicking the Electronic filing and other product news link. You can view the Home Page at any time by clicking the Home Page button toolbar. in the IRS QuickAlerts QuickAlerts is a free online service from the IRS that disseminates timely information via regarding processing delays, programming and telephone router problems, e-file publication and program changes, service center maintenance schedules, and IRS e-file Help Desk phone numbers. To subscribe to this free IRS service, visit envoyprofiles.com/quickalerts and complete all the necessary information.