Irs Form 1040 Schedule D

Document Sample
Irs Form 1040 Schedule D Powered By Docstoc
					    Fall Fling
MeF 1040 Working
     Group


 Internal Revenue Service




   September 5, 2007
Agenda
• Administrative
    – Restrooms, Snack Bar, Cafeteria, Sign-in sheet, Name Tags
• Introductions – Name, Company, Position
• General MeF Information – Schedule, Forms, Functionality, Signature Alternatives, e-File Application,
  Fed/State, Shared Forms Philosophy
• Discussion Items
   – New e-File Types
   – e-File Field Numbers in Schema
   – Differences between MeF and Legacy e-file
   – Business Rules
   – Alerts
   – Repeating Groups
   – Form Occurrences and Miscellaneous
   – Automated Enrollment/Strong Authentication
• Feedback on Meeting
• Questions
• Next Meeting – TIGERS venue, calls, face to face
• MeF File Packaging – (For MeF First-time Users)




                                                                                                          2
Approach




           3
MeF 1040 Status Update

 Phase I    June 2009 ATS             TY2008 (1040 and 10 forms*)
            August 2009 Production
 Phase I    November 2009 ATS         TY2008 and TY2009 (1040
                                      and 10 forms*)
            January 2010 Production

 Phase II   November 2010 ATS         TY2010 1040 and all forms
            January 2011 Production   TY2008 and TY2009 (1040
                                      and 10 forms*)



First Schema Publishing: Tentatively scheduled March 2008



                                                                    4
Forms


                         MeF 1040 Phase I Forms


                  1040       1040 Sch D    2441    8863
   Phase I     1040 Sch A   1040 Sch EIC   4868    W-2

               1040 Sch B      1099-R      8812
                 Sch C       Schedule SE   4562*   8880
 Add'l Forms
   Phase I     Schedule E       2106       8283*   8888
               Schedule R       2210       8829

                                                          5
Functionality

 • Functionality
   – Amended Returns implemented in January 2010
   – Fiscal Year Returns
      • Implemented in January 2010
      • Feedback on need for fiscal year returns functionality




                                                                 6
Signature Alternatives

 • MeF 1040 Program will have 2 signature alternatives
   starting in August of 2009.
   – Practitioner PIN
   – Self-Select PIN
 • Note: No scanned or paper Form 8453 or Form 8453-OL
   will be allowed.
 • Issue: The Form 1040 jurats and legacy authentication
   record have only one taxpayer signature date, but the Form
   1040 for a joint return has a place for both taxpayers to sign
   and date. Should MeF allow for 2 taxpayer signature
   dates or should we remain consistent with 1040 legacy and
   allow for only 1 taxpayer signature date?


                                                                    7
IRS e-file Application


  • MeF will have 2 transmission channels IFA and A2A for the MeF
    1040 Program. (Starting in January of 2008, EMS will no longer be
    used for MeF transmissions.)
  • For MeF, Transmitter will select 1040 and the transmission method
    of MeF Internet XML.
  • You must delegate a person or persons within your firm who will
    transmit for your company.
  • Their authorities on the IRS e-file Application must show MeF
    Internet Transmitter (IFA) or MeF System Enroller (A2A).
  • Those delegated individuals must complete the e-Services
    Registration process to choose the Username and Password that
    they will use to transmit returns through the Internet (RUP) or
    access the Automated System Enrollment application.



                                                                        8
MeF Fed/State Program

 • Taxpayer submits federal and state returns as
   separate submissions.
 • A taxpayer submits a separate state return for each
   state they have a filing requirement
 • Each state return has state data and taxpayer
   provided federal portion
 • The federal data to be included in a state return is
   governed by each state (some states require certain
   pages of the federal 1040 while others may require
   a copy of the entire federal return)
 • MeF only makes available to the states, what the
   taxpayer includes in the state return package!

                                                          9
What is linked and unlinked?

 • State returns may be formatted as:
   – Fed/State returns (state return is linked to the federal return)
   – Stand-Alone (unlinked – there is no association to the federal
     return)
 • Linkage is determined by the state and taxpayer.
 • The state decides whether they will support linked or
   unlinked or both. If they support both, then taxpayer has
   choice of which they want to send.
 • If the state requires linkage (linked), the federal return
   Submission ID must be in the state manifest.
 • If the state allows stand-alone (unlinked), the federal return
   Submission ID will not be provided in the state manifest.


                                                                        10
Linked Fed/State Submission



  IRS Submission                                         State Submission
      IRS Submission Manifest                              State Submission Manifest
       Submission Id                         Refers to       Submission Id
       …                                                     …
                                                             IRS Submission Id

                    XML Data

                                                                      XML Data
               Binary Attachment
                Binary Attachment
                                                                 Binary Attachment
                                                                  Binary Attachment
                                             Copy of
  • IRS SubmissionID is not present for
  State-only submission                                         IRS Submission XML
                                                                 IRS Submission Info
  • IRS Submission XML (State) may be
  subset of IRS XML Data (IRS), or may
  contain extra data not submitted to IRS.                     IRS Binary Attachment
                                                                  Binary Attachment



                                                                                       11
Processing State Returns on MeF

 • Linked returns
   – If the state return is a linked return, the federal return must be
     accepted or MeF will deny the state return (reject the return
     without forwarding it to the state).
   – When federal and state submissions are contained in the same
     transmission, MeF is designed to process the federal return
     prior to processing the state return.


 • State Stand-Alone returns (unlinked)
   – If submitted as state stand-alone return, MeF will not look for a
     federal return associated with the state return.
   – If state return passes validation criteria and the State allows
     Stand-Alone (unlinked) returns, the state return is made
     available to the state.



                                                                          12
Status of state returns

 • Transmitter sends state return to IRS
 • IRS validates state return
   – If linked return, check IRS SubmissionId and State
     Participation
   – If unlinked, check State Participation
 • If valid, MeF makes state return available to state
 • State retrieves state returns from MeF
 • State sends receipt for state return to MeF
 • State processes state return and sends state
   acknowledgement to MeF
 • Transmitter retrieves state acknowledgement from MeF


                                                          13
Shared Form Philosophy

 • A shared form must be consistent between form families
   (e.g., 4562 on 1120 needs to be the same as 4562 on
   1040)
 • IRS acknowledges there were problems with shared forms
   in some of the previous schema versions
 • IRS is improving the process to eliminate these problems
 • We definitely want input from software developers
   – Input on form versioning
   – Suggestions on other ideas to keep shared forms in sync




                                                               14
New e-FileTypes

 • PersonFullNameType – A complex type which consists of:
   – Person first name – alpha, hyphen and space – 20 characters
   – Person Last name - alpha, hyphen and space – 20 characters
 This type will be created for forms that require an individuals last
  name and first name to be entered in separate fields.




                                                                        15
New e-FileTypes (continued)

 • NameLine1Type – This e-FileType will be created to accept
   the Primary or Primary and Spouse name combined and is
   35 characters in length.
   – No leading or consecutive embedded spaces. The only
     characters allowed are alpha, ampersand (&), hyphen (-),
     less-than sign (<) and space.
 • PersonNameControlType – This e-FileType will be created
   to accept the first four significant characters of the primary
   taxpayer's last name and is 4 characters in length.
   - No leading or embedded spaces are allowed. The first left-
     most position must contain an alpha character. Only alpha,
     hyphen, and space are allowed. Omit punctuation marks,
     titles and suffixes.


                                                                    16
New e-FileTypes (continued)

 • 1099RDistributionCodeType – This e-FileType will be
   created for the distribution code required in box 7, of the
   form 1099-R.
   – The legal characters are: 1-9, A, B, D, E, F, G, J, L, N, P, Q, R, S, and
     T.
 • StateIDNumberType – This e-FileType will be created for
   the state ID number required on the Forms 1099-R and W-
   2. It is alphanumeric and 16 characters in length.
 • FormConditionIndType – This e-FileType will be created to
   identify whether the text on the Forms 1099-R and W-2 is
   altered, typed or handwritten. The field is 1 character in
   length. The following values are allowed:
     N = Non-standard (altered, typed or handwritten)
     S = Standard


                                                                                 17
New e-FileTypes (continued)

 • RelationshipType – This e-FileType will be created for
   forms that require the taxpayer to identify what their
   relationship is to another individual. The type is alpha and
   is 11 characters in length.
   – The values must be typed in upper case.
   – Values are: "CHILD', "FOSTERCHILD","GRANDCHILD",
     "GRANDPARENT", ―PARENT","BROTHER", "SISTER",
     "AUNT", "UNCLE", "NEPHEW", "NIECE", "NONE", "SON",
     "DAUGHTER" and "OTHER―.




                                                                  18
New e-FileTypes (continued)
• ChildRelationshipType – This e-FileType will be created for
  forms that require the taxpayer to identify what their
  relationship is to a child for which they are claiming a credit.
  The type is alpha and is 11 characters in length.
  – The values must be typed in upper case.
  – Values are: ―CHILD‖, ―SON‖, ―DAUGHTER‖, ―GRANDCHILD‖,
    ―FOSTERCHILD‖, ―SISTER‖, ―BROTHER‖, ―NIECE‖,
    ―NEPHEW‖, ―STEPCHILD‖, ―STEPBROTHER‖ and
    ―STEPSISTER‖.




                                                                     19
New e-FileTypes (continued)

 • NumberOfDaysType – In the past this e-FileType has only
   been used by the Form 2220 and was only present in the
   schema for the Form 2220. It will now be shared with the
   Form 2210 and will be moved to the efiletype.xsd schema
   package. This type is an integer type with a length of 3.
 • USItemizedEntryTotalType - A complex type which consists of:
   – LineExplanationType – open text – 100 characters
   – USAmountType - integer – 15 characters
   – Total of amounts
 This type will be created to allow for a total of the
  USAmountTypes.



                                                                  20
ELF Field Numbers in Schema

                           Option 1
 Add ELF field number as a comment before element?

 <!-- Adjusted Gross Income (ELF field [0750]) -->
 <xsd:element name="AdjustedGrossIncome" type="USAmountType"
  minOccurs="0">
 <xsd:annotation>
 <xsd:documentation>
 <Description>Adjusted Gross Income</Description>
 <LineNumber>37</LineNumber>
  </xsd:documentation>
  </xsd:annotation>
  </xsd:element>


                                                               21
ELF Field Numbers in Schema (continued)

                               Option 2

     Add ELF field number after line number?

 <xsd:element name="AdjustedGrossIncome" type="USAmountType"
  minOccurs="0">
 <xsd:annotation>
 <xsd:documentation>
 <Description>Adjusted Gross Income</Description>
 <LineNumber>37</LineNumber>
 <ELFFieldNumber>0750</ELFFieldNumber>
  </xsd:documentation>
  </xsd:annotation>
  </xsd:element>



                                                               22
ELF Field Numbers in Schema (continued)

                              In some instances

    ELF has two fields and MeF will have one element.




   MeF will have one element called ―Three Or More Qlfy Children‖.
   Option 1 - List both ELF field numbers?
   Option 2 - List first ELF field number only?                      23
ELF Field Numbers in Schema (continued)

                                   In some instances

       Items may appear in a different record in MeF
                             than they did in ELF
 For example:
 • Certain items found in ELF Summary will appear in Return Header.
   – Software ID Number
   – Software Version Identifier
   – Consortium Return Code
 • Certain items found in ELF Authentication Record will appear in
   Return Header.
   – Jurat Disclosure Code
   – PIN Type Code
   – Taxpayer DOB, Prior Year AGI, etc.


   Option 1 – Leave ELF Field numbers blank?
   Option 2 – Other?

                                                                      24
ELF Field Numbers in Schema (continued)

                        In some instances

    MeF may include items not found in ELF


      For example:
             Submission ID
             Addition of new form lines


     In these instances, there will be no ELF field
                      references


                                                      25
ELF Field Numbers in Schema (continued)


    ELF Field Numbers for Repeating Groups

    ELF allows 4 occurrences of dependent first name before going
    to a statement.




   For MeF, there will be one element for ―Dependent First Name‖ which
   repeats ―X‖ number of times. We are going to list the ELF field number
   of only the first occurrence in the schema.
                                                                            26
MeF versus ELF Legacy Differences

 1040 MeF does not use the same ―Record types‖ as 1040 Legacy:
 • MeF does not use a ―TRANA‖, ―TRANB‖ or ―RECAP‖ Record. The
   IRS uses XML (Extensible Markup Language) that specifies the
   structure and content of an XML document. For information on
   how to structure a transmission file and a submission, please refer
   to the MeF Submission Composition Guide posted to irs.gov at:
   http://www.irs.gov/efile/article/0,,id=171946,00.html
 • MeF does not use an ―Authentication‖ Record. The same
   information can generally be found in the 1040 or the 4868 Return
   Header.
 • MeF does not use ―Preparer Notes‖, ―Election Explanation‖, or
   ―Regulatory Explanations‖. The same information that would go
   into these records will now go in ―named attachments‖ if it needs
   to be attached to a specific form or line on the return, or a
   ―General Dependency‖ schema.


                                                                         27
MeF versus ELF Legacy Differences (continued)

 • MeF does not use a ―Summary‖ Record. The same
   information can be found elsewhere within the return.
 • MeF uses the concept of ―Redundant Data‖. If data is
   already entered on another line of the same tax return, form
   or schedule, instead of entering the data a second time on
   a different line of the same tax return, form or schedule,
   MeF will pull the data from the other reference point and
   display it.
  For example: Form 1040, Line 37 displays the ―AGI‖
  amount. Rather than entering the ―AGI‖ amount again on
  Line 38, the XML schema will have a comment "Use value
  from line 37".



                                                                  28
MeF versus ELF Legacy Differences (continued)

 • ELF returns a RECAP Acknowledgement where they report
   the number of duplicates in the transmission. MeF
   acknowledges by return not transmission.
 • ELF has an Acceptance Code of "D" - MeF does not. We
   need your feedback on whether MeF needs to add an
   Acceptance Code of "D" or is the reject code sufficient?
 • Money amount fields in ELF Legacy allows for 12 positions
   (11 numerics and a sign). MeF allows for 15 positions. In
   most cases, MeF will be using the USAmountType which
   allows positive and negative numbers.




                                                               29
Business Rules



 • Within MeF the terminology ―Error Reject Code‖ has been
   replaced with ―Business Rules‖


 • In legacy what was Error Reject Code validation is now
   done thru either


   – Schema Validation, or
   – Business Rules




                                                             30
Business Rules

 • Business rules versus error reject codes


   – Business Rule numbers are longer than Error Reject Codes
     and contain dashes


   – The left side of the Rule number specifies the form or schedule
      • Form 1040 is shown as ―F1040-‖
      • Form 2441 is shown as ―F2441-‖
      • Schedule EIC is shown as ―SEIC-F1040-‖
      • Rules that are shared between forms are shown as ―R0000-‖




                                                                       31
Business Rules


   – The right side of the rule number is a numeric number with a
     length of three. It starts with 001 for each form and is
     incremented by one


      • Examples would be shown as ―F1040-001‖ ―F1040-002‖ ―F2441-001‖,
        ―SEIC-F1040-001‖ ―R0000-001‖


   – Since the business rules specify the form or schedule that the
     rule is associated with, three numerics are sufficient




                                                                          32
Business Rules

 • Converting Error Reject Codes into Business Rules

   – Some ERCs were eliminated because MeF performs the check
     differently
      • ERC 0005 is dealing with statement records which are handled differently
        in MeF.
   – Some ERCs were eliminated because MeF performs these types of
     checks in the schema validation
      • ERC 0010 states that each field can contain only the type of data
        specified in its field description on the record layout. MeF performs these
        checks in the schema validation because each field is defined by either
        an efile type or a specified value.
   – Some ERCs were converted to MeF Business rules with only minor
     changes
      • ERC 0073 – When Filing Status (SEQ 0130) equals ―5‖; number of
        children who Lived with You (SEQ 0240) must be significant.
      • F1040-017 – If Form 1040 Box 5 (FS Qualifying Widow) is checked, then
        Line 6c (Num Of Child Who Lived With You) must be greater than zero.


                                                                                      33
Business Rules
 • Converting Error Reject Codes into Business Rules
   (continued)

   – Some ERCs were converted to multiple MeF Business rules
      • ERC 0071 – When Secondary SSN (SEQ 0030) is significant, it
        must be within the valid ranges of SSN/ITIN’s, cannot equal an
        ATIN and cannot equal Primary SSN (SEQ 0010). It must be all
        numeric characters and cannot equal all zeros or all nines
      • F1040-013 – If the Spouse SSN of the tax return is present, then
        it must be within the valid range of SSN/ITIN and cannot equal an
        ATIN
      • F1040-014 – If the Spouse SSN of the tax return is present, then
        it cannot equal the Primary SSN on the tax return
      • The numeric, all zeroes and all nines checks are done in the
        schema validation



                                                                            34
Business Rules

 • Converting Error Reject Codes into Business Rules
   (continued)

   – The 500 series ERCs were numbered with the same number
      • ERC 501 was converted to SEIC-F1040-501
      • ERC 503 was converted to F1040-503
   – Some ERCs were converted to shared Business rules
      • Part of ERC 0019 which checks that the RTN is present on the
        Financial Organization Master File was converted into R0000-
        906. This is an existing rule which is shared with the corporate
        and partnership returns
      • ERC 502 which checks that the Identification number on Forms
        W-2 and 1099R matches the IRS Master File was converted to
        R0000-502 because both forms share this rule


                                                                           35
Adding Alerts to Acknowledgements
 Alerts will report conditions that do not cause the return to
  reject but may require special handling, and the Alert also
  can contain account information that the IRS thinks would be
  beneficial for the taxpayer to know.
   Possible examples include:
      • Notifying the ERO/taxpayer of a math error on the return.
      • When a taxpayer uses the Self-Select PIN signature option,
        they must enter their Date of Birth (DOB). Although MeF
        doesn’t reject the return for a DOB mismatch, the alert can
        recommend that the taxpayer contact the Social Security
        Administration to correct their records.
      • Instead of rejecting a return for an erroneous payment year (if
        that is the only thing wrong with the return), the return may be
        accepted but the acknowledgement will include an alert stating
        that the return was accepted, however the payment year was
        invalid but it was corrected in order to process the payment
        request.


                                                                           36
Adding Alerts (continued)

 MeF will use the following guidance:
 •   Reject severity error should have higher priority than Alert
     severity - e.g. if we have 200 rejects and 30 alerts, MeF
     should show the first 100 rejects (agreed upon number to
     return in an ACK) and no alerts. But MeF will use
     ―ContainsAlert‖ to indicate the return does contain alerts.
 •   Since rejects have a higher priority, the ACK will show the
     reject list first then the alert list.
 •   If MeF has 80 rejects and 40 alerts, then the ACK will
     show 80 rejects and the first 20 alerts.
 •   Accepted ACKs will only attach the first 100 alerts.




                                                                    37
Adding Alerts (continued)

 The MeF Acknowledgement has been updated to add a field
  "ContainedAlerts" to advise you if there are alerts in the
  ACK. On the next few slides, we will show you three
  examples that highlight different formats (ErrorList and
  AlertList) – Note: MeF has not defined the language in any
  alerts yet, so we used existing reject codes information to
  populate the AlertList.


      Examples:
      1) An Accepted return ACK with no alerts
      2) An Accepted return ACK with 2 alerts
      3) A Rejected return ACK with 3 errors and 2 alerts




                                                                38
Adding Alerts (continued)
 1) Accepted ACK with no alerts:

 <?xml version="1.0" encoding="UTF-8" ?>
 - <Acknowledgement xmlns="http://www.irs.gov/efile" xmlns:efile="http://www.irs.gov/efile"
    submissionVersion="2006v3.3" validatingSchemaVersion="2006v3.3">
   <SubmissionId>00888820071510038002</SubmissionId>
   <EFIN>008888</EFIN>
   <GovernmentCode>IRS</GovernmentCode>
   <SubmissionType>1120</SubmissionType>
   <TaxYear>2006</TaxYear>
   <SubmissionCategory>CORP</SubmissionCategory>
   <ElectronicPostmark>2007-06-01T08:28:20-05:00</ElectronicPostmark>
   <FilingStatus>Accepted</FilingStatus>
   <ContainedAlerts>No</ContainedAlerts>
   <StatusDate>2007-06-01</StatusDate>
   <EIN>003007305</EIN>
   <TaxPeriodEndDate>2006-12-31</TaxPeriodEndDate>
   <CompletedValidation>true</CompletedValidation>
   <EmbeddedCRC32>0xacc39e8</EmbeddedCRC32>
   <ComputedCRC32>0xacc39e8</ComputedCRC32>
   <TaxableIncome>179058786</TaxableIncome>
   <TotalTax>0</TotalTax>
   </Acknowledgement>




                                                                                              39
Adding Alerts (continued)
 2) Accepted ACK with 2 alerts:

 <?xml version="1.0" encoding="UTF-8" ?>
 - <Acknowledgement xmlns="http://www.irs.gov/efile" xmlns:efile="http://www.irs.gov/efile"
    submissionVersion="2006v3.3" validatingSchemaVersion="2006v3.3">
   <SubmissionId>00888820071510038002</SubmissionId>
   <EFIN>008888</EFIN>
   <GovernmentCode>IRS</GovernmentCode>
   <SubmissionType>1120</SubmissionType>
   <TaxYear>2006</TaxYear>
   <SubmissionCategory>CORP</SubmissionCategory>
   <ElectronicPostmark>2007-06-01T08:28:20-05:00</ElectronicPostmark>
   <FilingStatus>Accepted</FilingStatus>
   <ContainedAlerts>Yes</ContainedAlerts>
   <StatusDate>2007-06-01</StatusDate>
   <EIN>000007305</EIN>
   <TaxPeriodEndDate>2006-12-31</TaxPeriodEndDate>
   <CompletedValidation>true</CompletedValidation>
   <EmbeddedCRC32>0xacc39e8</EmbeddedCRC32>
   <ComputedCRC32>0xacc39e8</ComputedCRC32>
   <TaxableIncome>179058786</TaxableIncome>
   <TotalTax>0</TotalTax>
                                              Continued on next slide


                                                                                              40
Adding Alerts (continued)
                                             Continued from prior slide
 - <AlertList alertCount="2">
 - <Alert alertId="1">
   <XPath>/efile:Return/efile:ReturnData/efile:IRS1120/efile:IRS1120ScheduleJ/efile:PriorYearMinimumTaxCredit/@refer
    enceDocumentId</XPath>
   <AlertCategory>Missing Document</AlertCategory>
   <AlertMessage>If Form 1120, Schedule J, Line 5d has a non -zero value, the Forms 8827 must be
    attached.</AlertMessage>
   <RuleNumber>F1120-271</RuleNumber>
   <Severity>Alert</Severity>
   <DataValue>referenceDocumentId = IRS8827</DataValue>
   </Alert>
 - <Alert alertId="2">
   <XPath>/efile:Return/efile:ReturnData/efile:IRS1120/efile:IRS1120ScheduleK/efile:NumberOfForm5472Attached/@ref
    erenceDocumentId</XPath>
   <AlertCategory>Missing Document</AlertCategory>
   <AlertMessage>If Form 1120, Schedule K Line 7c has a non -zero value, then one or more Form 5472 must be
    attached.</AlertMessage>
   <RuleNumber>F1120-089</RuleNumber>
   <Severity>Alert</Severity>
   <DataValue>referenceDocumentId = IRS5472</DataValue>
   </Alert>
   </AlertList>
   </Acknowledgement>


                                                                                                                       41
Adding Alerts (continued)
 3) Rejected ACK with 2 alerts:

 <?xml version="1.0" encoding="UTF-8" ?>
 - <Acknowledgement xmlns="http://www.irs.gov/efile" xmlns:efile="http://www.irs.gov/efile"
    submissionVersion="2006v3.4" validatingSchemaVersion="2006v3.4">
   <SubmissionId>00101620071700024323</SubmissionId>
   <EFIN>001016</EFIN>
   <GovernmentCode>IRS</GovernmentCode>
   <SubmissionType>1120</SubmissionType>
   <TaxYear>2006</TaxYear>
   <SubmissionCategory>CORP</SubmissionCategory>
   <ElectronicPostmark>2007-06-20T11:24:14-05:00</ElectronicPostmark>
   <FilingStatus>Rejected</FilingStatus>
   <ContainedAlerts>Yes</ContainedAlerts>
   <StatusDate>2007-06-20</StatusDate>
   <EIN>000000986</EIN>
   <TaxPeriodEndDate>2006-12-31</TaxPeriodEndDate>
   <CompletedValidation>true</CompletedValidation>
   <EmbeddedCRC32>0x81e49c80</EmbeddedCRC32>
   <ComputedCRC32>0x81e49c80</ComputedCRC32>
   <TaxableIncome>179058786</TaxableIncome>
   <TotalTax>25947349</TotalTax>
                                             Continued on next slide


                                                                                              42
Adding Alerts (continued)
                                                   Continued from prior slide

 <ErrorList errorCount="3">
 - <Error errorId="1">
   <XPath>/efile:Return/efile:ReturnData/efile:IRS1120/efile:Form 2220Attached/@referenceDocumentId</XPath>
   <ErrorCategory>Missing Document</ErrorCategory>
   <ErrorMessage>If Form 1120, Line 33, check box "Form 2220 is attached" is checked, then Form 2220 must be
     attached.</ErrorMessage>
   <RuleNumber>F1120-112</RuleNumber>
   <Severity>Reject</Severity>
   <DataValue>referenceDocumentId = IRS2220</DataValue>
   </Error>
 - <Error errorId="2">
   <XPath>/efile:Return/efile:ReturnData/efile:IRS1120/efile:IRS1120S cheduleJ/efile:MemberOfControlledGroup </XPath>
   <ErrorCategory>Missing Document</ErrorCategory>
   <ErrorMessage>If Form 1120, Schedule J, Line 1 checkbox is checked, then Schedule O (Form 1120) must be attached to the
     return.</ErrorMessage>
   <RuleNumber>F1120-269</RuleNumber>
   <Severity>Reject</Severity>
   </Error>
 - <Error errorId="3">
   <XPath>/efile:Return/efile:ReturnData/efile:IRS1120/efile:Depreciation/@referenceDocumentId</XPath>
   <ErrorCategory>Missing Document</ErrorCategory>
   <ErrorMessage>If Form 1120, Line 20 has a non-zero value, then one or more Forms 4562 must be attached.</ErrorMessage>
   <RuleNumber>F1120-284</RuleNumber>
   <Severity>Reject</Severity>
   <DataValue>referenceDocumentId = IRS4562</DataValue>
   </Error>
   </ErrorList>


                                                                                                                             43
Adding Alerts (continued)
                                             Continued from prior slide


 - <AlertList alertCount="2">
 - <Alert alertId="1">
   <XPath>/efile:Return/efile:ReturnData/efile:IRS1120/efile:IRS1120ScheduleJ/efile:PriorYearMinimumTaxCredit/@refer
    enceDocumentId</XPath>
   <AlertCategory>Missing Document</AlertCategory>
   <AlertMessage>If Form 1120, Schedule J, Line 5d has a non -zero value, the Forms 8827 must be
    attached.</AlertMessage>
   <RuleNumber>F1120-271</RuleNumber>
   <Severity>Alert</Severity>
   <DataValue>referenceDocumentId = IRS8827</DataValue>
   </Alert>
 - <Alert alertId="2">
   <XPath>/efile:Return/efile:ReturnData/efile:IRS1120/efile:IRS1120ScheduleK/efile:NumberOfForm5472Attached/@ref
    erenceDocumentId</XPath>
   <AlertCategory>Missing Document</AlertCategory>
   <AlertMessage>If Form 1120, Schedule K Line 7c has a non -zero value, then one or more Form 5472 must be
    attached.</AlertMessage>
   <RuleNumber>F1120-089</RuleNumber>
   <Severity>Alert</Severity>
   <DataValue>referenceDocumentId = IRS5472</DataValue>
   </Alert>
   </AlertList>
   </Acknowledgement>


                                                                                                                       44
Repeating Groups

 • In Legacy IMF ELF there is a one to one relationship
   between fields as displayed on the form and the
   corresponding Record Layout and resulting schema.




                                                          45
Repeating Groups (continued)

 • In MeF, this hard coded limit to the number of occurrences of a
   column or row can be avoided by the use of ―Repeating Groups.‖
 • Below is an example of a Repeating Group using Form 4797 as
   an example. In this example, Lines 2(a) – 2(g) are defined as a
   Repeating Group.




                                                                     46
Repeating Groups (continued)

 • Here is an example of how a Repeating Group is displayed
   when the MeF return is viewed in the Returns Request and
   Display.




                                                              47
Repeating Groups (continued)




 • For every Repeating Group, a minimum and maximum
   number of occurrences must be set, as shown in the
   excerpt from a schema above.
 • Due to storage space constraints, we may no longer set the
   maximum number of occurrences for a Repeating Group as
   ―Unbounded.‖ We must set a finite limit of maximum
   occurrences for the Repeating Groups within each Form
   and Schedule. We would like your input on the following
   forms:
                                                                48
Repeating Groups (continued)
 • Form 8863 – Education Credits, Part I and Part II
    – Is 25 a reasonable upper limit for the number of occurrences
      for Hope Credit Students?
    – Is 25 a reasonable upper limit for the number of occurrences
      for Lifetime Learning Credit Students?




                                                                     49
Repeating Groups (continued)

 • Form 2441 - Child and Dependent Care Expenses
    – Is 25 a reasonable upper limit for the number of occurrences
      for Part II Qualifying Person(s)?




                                                                     50
Repeating Groups (continued)

 • Form 8283 – Noncash Charitable Contributions
    – This form is shared by corporations, partnerships and
      individuals. (We will discuss more on this later.)
    – What is a reasonable upper limit for the number of
      occurrences for Repeating Groups in Section A Part I?




                                                              51
Repeating Groups (continued)

 • Form 8283 – Noncash Charitable Contributions
    – What is a reasonable upper limit for the number of
      occurrences for Repeating Groups in Section B, Part I?




                                                               52
Repeating Groups (continued)

 • Schedule A - Itemized Deductions
   – Is 50 a reasonable upper limit for the number of occurrences
     for Line 8 Other Taxes, Line 21 Unreimbursed Employee
     Expenses, Line 23 Other Expenses and Line 28 Other
     Miscellaneous Deductions?




                                                                    53
Repeating Groups (continued)

 • Schedule C (Form 1040)– Part V Other Expenses
   – What is a reasonable upper limit for the number of
     occurrences? 100, 500, 1,000, more?




                                                          54
Repeating Groups (continued)

 • Schedule D (Form 1040) – Capital Gains and Losses
    – What is a reasonable upper limit for the number of
      occurrences of Short-Term Capital Gains and Losses?
    – An entry on line 2 from Schedule D-1 or the Legacy STCG
      Statement will not be necessary with the appropriate upper
      limit of Repeating Groups established.




                                                                   55
Repeating Groups (continued)
 • Schedule D (Form 1040) – Capital Gains and Losses
    – What is a reasonable upper limit for the number of
      occurrences of Long-Term Capital Gains and Losses?
    – An entry on line 9 from Schedule D-1 or the Legacy LTCG
      Statement will not be necessary with the appropriate upper
      limit of Repeating Groups established.




                                                                   56
Repeating Groups (continued)

 • Schedule E (Form 1040) – Supplemental Income and Loss
    – The Legacy ELF 1040 has 3 properties per each Schedule E
      allowed in Part I.
    – What is a reasonable upper limit for the number of
      occurrences of Properties listed on a Schedule E?




                                                                 57
Repeating Groups (continued)

 • Schedule E (Form 1040) – Supplemental Income and Loss
    – The Legacy ELF 1040 has space for 4 Partnership or S
      Corporations per each Schedule E allowed.
    – What is a reasonable upper limit for the number of
      occurrences of Partnerships and S Corporations listed on a
      Schedule E, Part II?




                                                                   58
Repeating Groups (continued)
 • Schedule E (Form 1040) – Supplemental Income and Loss
   – The Legacy ELF 1040 has space for a total of 2 Estates or
     Trusts in Part III per each Schedule E allowed.
   – The Legacy ELF 1040 has space for a total of 1 Real Estate
     Mortgage Investment Conduits (REMICs)—Residual Holder in
     Part IV (without attaching a statement) per each Schedule E
     allowed.
   – What is a reasonable upper limit for the number of
     occurrences of Estates or Trusts in Part III and REMICS in
     Part IV of each Schedule E?




                                                                   59
Form Occurrences

 • In addition to setting the maximum number of occurrences for
   Repeating Groups, we must now also set the maximum number
   of occurrences for Forms and Schedules.
 • Some examples of high occurrence Forms that have come in
   with MeF BMF returns are:
   – Form 8858
   – Form 8594
   – Form 8865
 • Some high occurrence Forms are shared between Corporate,
   Partnership and Individual returns. The maximum occurrence
   allowed must be set high enough to not cause problems for all
   three categories.
 • We will be sending out a list of Forms that will be implemented in
   Phase II that will need to have a maximum number of
   occurrences. We will look forward to your recommendations
   regarding these Forms.

                                                                        60
Data Written on Tax Form (Repeating Group or
Dependency)




 • Schedule A (Form 1040), lines 8, 21, 23 and 28 allow for line item
   descriptions and amounts (repeating group) to be written on the form.
 • How does MeF handle?
 • Option 1 – Repeating Group – Form? Allows for the information without
   having to have an additional attachment.
 • Option 2 – Dependency? No data will be written on the form and all
   information will be contained in the attachment.
 • MeF 1040 currently handling as a written data (repeating group) on the form
   in the record layout.

                                                                                 61
Required Data
  •Schedule R (Form 1040), lines 1 thru 9 are filing status and age checkboxes.
  Taxpayers are required to check only one box.




                                                                              62
Required Data – Schedule R (continued)

 • How does MeF 1040 handle to ensure one and only one
   box is checked?
 • Option 1 – Business Rule? Receive a business rule reject
   that identifies the specific error
 • Option 2 – Schema Validation? Receive a generic business
   rule reject (X0000-005) but the location (xpath) points to the
   incorrect/invalid field(s).
 • MeF 1040 currently handling through schema validation.




                                                                    63
Restricted Data or Unrestricted Data
 • Form 2106, line 33 says ―Enter depreciation method and percentage (see instructions‖).
   Depreciation Method and Percentage Chart—Line 33
   Date Placed in Service (a)1 (b)1 (c)
    –   Oct. 1 – Dec. 31, 2006 200 DB 5.0 % 150 DB 3.75% SL 2.5%
    –   Jan. 1 – Sept. 30, 2006 200 DB 20.0 150 DB 15.0 SL 10.0
    –   Oct. 1 – Dec. 31, 2005 200 DB 38.0 150 DB 28.88 SL 20.0
    –   Jan. 1 – Sept. 30, 2005 200 DB 32.0 150 DB 25.5 SL 20.0
    –   Oct. 1 – Dec. 31, 2004 200 DB 22.8 150 DB 20.21 SL 20.0
    –   Jan. 1 – Sept. 30, 2004 200 DB 19.2 150 DB 17.85 SL 20.0
    –   Oct. 1 – Dec. 31, 2003 200 DB 13.68 150 DB 16.4 SL 20.0
    –   Jan. 1 – Sept. 30, 2003 200 DB 11.52 150 DB 16.66 SL 20.0
    –   Oct. 1 – Dec. 31, 2002 200 DB 10.94 150 DB 16.41 SL 20.0
    –   Jan. 1 – Sept. 30, 2002 200 DB 11.52 150 DB 16.66 SL 20.0
    –   Oct. 1 – Dec. 31, 20012 200 DB 9.58 150 DB 14.35 SL 17.5
    –   Jan. 1 – Sept. 30, 2001 200 DB 5.76 150 DB 8.33 SL 10.0

 • How does MeF 1040 handle?
 • Option 1 – TextType? Allow a value up to 35 characters to provide the applicable method
   and percentage.
 • Option 2 – Restricted? Provide each method and percentage as stated in the chart in the
   schema. Will these value change form year to year?
 • MeF 1040 currently handling as a TextType of 35 in the record layout.


                                                                                             64
1040 eFile Record Layouts with Page Numbers
 • 1040 eFile Record Layouts have forms divided into page numbers such as 1040 PAGE 1 and 1040 PAGE 2.
 • MeF schemas do not use page numbers. There are ―comment‖ lines in the schema where a section
   breaks but it is all one schema.

 1040 Record Layout Example (Note: Form 1040 has 2 pages)
 FORM 1040 PAGE 1          U.S. Individual Income Tax Return
 Field Identification Form Length Field Description
        No.           Ref.
 ----- -------------- ----   ------   -----------------

 0002 Page Number        5     "PG01b"
 1120 Schema Example (Note: Form 1120 has 4 pages; Schedule A begins page 2)
 <!-- ============================================================== --
 >=================== IRS Form 1120 ================================>
 <!=============================================================== --
 >other schema lines)
 <!-- Refunded Amount -->
             <xsd:element name="Refund" minOccurs="0">
             <xsd:annotation>
             <xsd:documentation>
             <Description>Refunded amount</Description>
             <LineNumber>36</LineNumber> other schema lines)
 <!-- ============================================================== -->
 <!-- ===================== IRS Form 1120 Schedule A =================== -->
                                                                                                         65
 <!-- ============================================================== -->
Attachments to Forms or Schedules

 • MeF 1040 will allow attachments to forms and schedules as done now
   for MeF corporate and partnership returns.
 • XML documents can be ―attached‖ to either a line, or a form/schedule
   or return.
 • When a document is attached to an (XML) element then there is a
   reference (pointer) from the element to the attached document.
 • Two attributes indicate the attachment of a supporting document to an
   XML element.
   – The attribute named ―referenceDocumentName‖, wherever it appears, is
     used to enumerate the document(s) that can be attached to the element.
   – The attribute named ―referenceDocumentId‖ establishes a reference from
     the element where it appears, to the attached document(s).
 • When the business rule is looking for supporting XML document
   attached to a line, form/schedule or return, and the supporting XML
   document is not attached there, the return would be rejected.



                                                                              66
Attachments to Forms or Schedules (continued)

 • Current Form 1040 statement reference:

 FORM 1040 PAGE 1          U.S. Individual Income Tax Return
 Field   Identification Form Length Field Description
 No.     Ref.
 -----   -------------- ------   ---------- -------------------------
 @0135 Overseas Extension         6         "STMbnn" or blank
 Explanation
 • MeF 1120 attachments:
 <!-- ====================== -- IRS Form 1120 ========================= --><!--
    =============================================================== -->
 <!-- Other Income -->
 <xsd:element name="OtherIncome" minOccurs="0">
 <Description>Other income</Description>
 <LineNumber>10</LineNumber>
 <xsd:extension base="USAmountType">
 <xsd:attribute name="otherIncomeItem" type="ShortDescriptionType" />
 <xsd:attribute name="referenceDocumentId" type="IdListType" />
 <xsd:attribute name="referenceDocumentName" type="StringType"
 fixed="ItemizedOtherIncomeSchedule IRS8816" />
 </xsd:element                                                                    67
MeF Discussion Items

 • 100 Submissions
 • Paper Indicator – 8453 Transmittal
 • Allow multiple form types to be transmitted
   together? (Ability for prioritization)
 • Legacy e-File uses Address Indicators. MeF controls
   through the schema USAddressType and
   ForeignAddressType. Any problems?
 • Electronic postmark is in three fields for e-file and just one
   field for MeF
 • e-File has a Direct deposit indicator as well as the Direct
   Deposit data. Do we need both?


                                                                    68
Automated Enrollment

 • Enrolling SystemIDs for A2A transmission is currently a manual
   process.
 • Automated Enrollment gives the transmitter/state (who has been
   given the authority as MeF System Enroller) the ability to enroll
   or update their SystemIDs
 • The System Enroller can perform the following tasks
   – Add, update or delete a SystemID
   – Change the option from user name/password to certificate
   – Upload certificates for SystemIDs
   – Change the Services that SystemID can perform
   – Add or delete the ETINs that are associated with the SystemID
 • Scheduled to be rolled out with ATS (Nov 2007)


                                                                       69
E-file application authorities – MeF System Enroller




                                                 70
Person with MeF System Enroller authority can get
to A2A link on e-Services welcome page




                                               71
Strong Authentication
 • In order to meet security requirements from HSPD-
   12, IRS will require external partners to get X.509
   certificates from one of several public Certificate
   Authorities (CAs).
   – IdenTrust;    http://www.identrust.com/certificates/buy_aces.html

   – Or EnTrust;     http://www.entrust.net/index.htm

   – Or Verisign;      http://www.verisign.com/ssl/buy-ssl-
    certificates/index.html

   – Or ORC;     http://aces.orc.com/




                                                                         72
Strong Authentication, cont.

 • Enroll a new SystemID for testing with certificates.
   The SystemID may use either user name/password or
   certificates but not both
 • Partners will upload a certificate with IRS and
   associate it with one or more SystemIDs.
 • User Guide will be distributed in the fall.




                                                          73
Transmission and Submission Packaging

 • A2A Message SendSubmissions
 • The SendSubmission service request is used to transmit
   submissions. It can have one and only one attachment.
   This attachment must be an uncompressed zip file called
   the container zip file. The container zip file can contain one
   or more compressed zip files. Each of these zip files
   contain one federal or state submission.




                                                                    74
Application to Application (A2A)

 • Packaging and file structure




                                   75
A2A Message with attachments

 • A2A Message with attachments




                                  76
TransmissionHeader
 • TransmissionHeader – The TransmissionHeader contains
   information on the TransmissionID, the ETIN and the Timestamp
 • SOAP:Header>
 • <TransmissionHeader>
 • <TransmissionId>0000112009000070</TransmissionId>
 • <Timestamp>2009-09-22T14:05:57+06:43</Timestamp>
 • <Transmitter>
 • <ETIN>00001</ETIN>
 • </Transmitter>
 • </TransmissionHeader>
 • </SOAP:Header>
 • <SOAP:Body>


                                                                   77
TransmissionManifest
 • TransmissionManifest – The Transmission Manifest provides information
   on the returns in the transmission - the count of returns, the SubmissionID
   of the returns, and an Electronic Postmark, if applicable
 • <TransmissionManifest>
 • <SubmissionDataList> <Count>2</Count>
 • <SubmissionData>
 • <SubmissionId>00007520093470015686</SubmissionId>
 • <ElectronicPostmark>2009-09-22T14:05:57+06:43</ElectronicPostmark>
 • </SubmissionData>
 • <SubmissionData>
 • <SubmissionId>00007520093470015687</SubmissionId>
 • <ElectronicPostmark>2009-09-22T14:06:02+06:43</ElectronicPostmark>
 • </SubmissionData>
 • </SubmissionDataList>
 • </TransmissionManifest>


                                                                                 78
Submission Zip file
 • Each submission contains the following folders
   (directories), which are then packaged and compressed
   into a zip file:
   – /manifest.
   – /xml.
   – /attachment. The attachment directory contains binary
     attachment files. This directory is required only if there are
     binary attachments in the Submission. The attachment folder
     is an optional folder in a submission zip file




                                                                      79
IRS Submission Manifest

 • IRS Submission Manifest The manifest folder (directory)
   contains a manifest.xml file, which contains information about the
   Submission, for example, the ERO who composed the
   Submission and the tax year for which the IRS Submission is
   being filed.
 • <IRSSubmissionManifest xmlns= http://www.irs.gov/efile
   xmlns:efile="http://www.irs.gov/efile">
 • <SubmissionId>00007520093470015686</SubmissionId>
 •      <EFIN>000075</EFIN>
 •      <GovernmentCode>IRS</GovernmentCode>
 •      <SubmissionType>1040</SubmissionType>
 •      <TaxYear>2008</TaxYear>
 • </IRSSubmissionManifest>


                                                                        80
IRS XML Data

 • XML Directory - The xml directory contains the
   submission.xml file with the submission data in XML format.
 • The XML data is made up of the
   – ReturnHeader and
   – ReturnData.




                                                                 81
IRS ReturnHeader

 • The IRS ReturnHeader contains high level return
   information including the following:
   – SubmissionID
   – EFIN
   – SignatureOption
   – Filer SSN(s) and Name Control(s)
   – Taxpayer Name Line 1
   – Preparer Information
   – And more…..




                                                     82
IRSReturnData

 • The IRS Return Data contains the Form 1040, attached
   forms and schedules and XML attachments.
   – Count of documents in the return
   – 1040 data
   – Attached forms and schedules
   – Payment information, if applicable
   – XML Attachments and General Dependencies
   – XML Binary Attachment documents




                                                          83
IRS Attachment Directory

 • The Attachment Directory contains the PDF files that are
   attached to the return.
 • One Binary Attachment XML document must be created for
   each binary attachment. There is one-to-one relationship
   between the PDF file and the Binary Attachment XML
   document that describes it.
 • The Binary files are in the Attachment Directory
 • The Attachment XML document is in the XML Data.




                                                              84

				
DOCUMENT INFO
Description: Irs Form 1040 Schedule D document sample