How Tax Preparation Software is Approved for Electronic Filing
IRS requires all tax preparation software used for preparing electronic returns to pass the requirements for Modernized e-File Assurance Testing (ATS) as briefly explained below:
IRS issues a publication that includes a series of test tax returns and instructions. Each form family has a different publication and can be found on the MeF User Guides and Publications page:
- Publication 1436 for individual returns
- Publication 4162 for corporate returns
- Publication 4205 for exempt organization returns
- Publication 4505 for partnership returns
- Publication 4594 for excise tax returns
- Software vendors notify IRS at the e-help Desk (1-866-255-0654) that they plan to test and provide a list of forms they plan to include in their tax preparation software.
Note: IRS does not require software vendors to support all forms. They are allowed to develop their tax preparation software based on the needs of their clients.
- Software vendors use the test scenarios in the publications above to create test returns and format in the specified Extensible Markup Language (XML) format.
- The software vendor transmits the XML formatted test tax returns to IRS.
- An e-help Desk assistor checks data entry fields on the return.
- These checks ensure tax calculations on the test return matches the answers provided by IRS on the test returns.
- These checks also ensure the software correctly formats the test tax return data in XML format and the data can be successfully transmitted to, received and the tax return viewed by IRS.
- When IRS determines the software correctly performs all required functions it is approved for electronic filing.
- Software vendors are allowed to market their tax preparation software as approved for electronic filing to corporations and/or tax professionals after the approval from IRS is received.
NOTE: The test returns issued by IRS do not include all forms or schedules that can be part of an actual return.