The Internal Revenue Service (IRS) is implementing a new version for electronic filing for the motor fuel industry. This filing requirement pertains to:

• Registered terminals
• Pipeline carriers
• Ship carriers
• Barge carriers

Terminal Operator

A terminal operator must submit a physical ending inventory for the month prior to the date of reporting.

For example:
If you are required to file an October report electronically, you must submit the ending inventory for the month of September in the new EDI 4030 format found in the IRS ExSTARS Motor Fuel Excise Tax EDI Guide – Publication 3536. The ending inventory for September will be the beginning inventory for October. The October terminal operator report is due November 30.

Carrier

A petroleum carrier required to file reports electronically must submit the information one month after the close of business for the file month.

For example: The October report is due November 30.

Test Files

Carriers and terminal operators will be required to file their reports in the EDI format. These reports will contain all of the detail for each shipment for the month the Information Provider is required to file. In order to ensure the quality of the information obtained from this filing requirement, the IRS will subject the information received to a set of tests. These tests will help guarantee that the information submitted is useful.

Prior to the first filing date, the terminal operators and petroleum carriers will have to submit test files to the IRS for validation. The IRS will process the test files through a translator to make sure that the information provider's EDI files adhere to the IRS mapping requirements and the American National Standards Institute (ANSI) X12 standards.

Summary Reports

The Information Provider will be required to submit paper summary reports containing the same information as found on Form 720-TO and/or Form 720-CS, without Schedules A & B, summarizing the detail information contained in the test file, as if you were filing on paper. This information is used to verify the data transmitted.
Directions on where to send the summary reports will be provided as part of the test instructions received during the letter of application (LOA) process.

If you are reporting as a terminal operator your report should summarize the receipts into and disbursements out of the terminal by product. The beginning inventory, ending inventory and any stock gains or losses by product should also be included as part of the summary report.

If you are reporting as a petroleum carrier your report should summarize carrier receipts and carrier disbursements by each product code received from and delivered to a terminal.

If you are filing as both a terminal operator and a petroleum carrier, your report should summarize the receipts into and disbursements out of the terminal by product. The beginning inventory, ending inventory and any stock gains or losses by product should also be included as part of the summary report. Summary reports should be faxed or emailed to the IRS test resources. Directions on where to send the summary reports will be provided as part of the test instructions received during the Letter of Agreement process. Your report should also summarize carrier receipts and carrier disbursements by each product code received from and delivered to a terminal.

Test File Submission

All data submitted or received from IRS Excise will be transmitted through Secure Socket Layer (SSL) protocol and processed by the IRS Excise application. Instructions for uploading and downloading files, file naming conventions, and specific testing instructions for each of these steps will be provided as part of the letter of application (LOA) process. These testing steps and directions, as outlined in the LOA, will be amended as required to accommodate testing requirements as they evolve for both new and existing filers (e.g., EDI version changes).

Connectivity Testing

This is the initial step that will ensure the ability to transmit and receive electronic files with IRS Excise.  All data submitted to or received from IRS Excise will be transmitted using Secure Socket Layer (SSL) encryption and processed by the IRS Excise ExSTARS system.  Instructions for accessing the IRS ExSTARS website along with uploading and downloading files have been provided as a separate attachment along with this set of test packet instructions. When the participant initially connects in to the ExSTARS website there will be files already placed in their download directories.  Download these files and follow the directions for confirming their receipt.

The next step is to upload an EDI file to ExSTARS.  All files submitted to ExSTARS should be named using the following naming convention:

NOTE: File names may not contain spaces or special characters and the file extension should always be ‘.edi’.

‘Name Control’_’ Sender-ID’_‘transaction set number(i.e. 813)’_‘period being filed (formatted mmccyy)’_‘’T’est or’P’roduction’_‘qualifier from BTI13 or BTI14 followed by the extension ‘.edi’.

Example: TOTA_757654321000000_813_093003_T_00.edi

If you experience difficulty logging into ExSTARS , please contact the IRS ExSTARS  Help Desk at (859) 669-5352 at Cincinnati Compliance Services Center (CCSC)  (not a toll free call) for assistance.

Success for this phase of the testing process is determined to be:

1. The participant’s ability to successfully pull files from their ExSTARS download directories and open and read the file content and
2. The ability of the IRS ExSTARS test team to be able to receive files from the participant’s upload directories and that they can successfully open and review the content.

Once connectivity has been established and the method for the uploading and downloading of these files has become familiar, it is time to progress to the next step of EDI testing.

EDI Structure/Syntax Translation Testing

This phase of the testing process will be used to verify that the EDI files can be opened and read and that the structure/syntax contained in the files submitted by the information provider/transmitter is sound.  The files will need to be compliant with EDI ANSI ASC X12 Version 4030 and the IRS ExSTARS Publication 3536 Excise Tax EDI Guide Version 2.0 guidelines.  Items such as field length, loop structures and evaluation of use of supplied ID qualifier codes will be checked during this phase.  There is no intent during this phase to check data validity. The files may be derived from current, historical or self-generated information that is representative of a filing period.

The electronic participant will start by submitting an original (BTI13 = ‘00’) 813 transaction set for a period of their choosing.  During this phase the IRS ExSTARS test team will be returning only 997 Functional Acknowledgement transaction sets.  The goal of this phase is for the electronic participant to successfully submit three unique consecutive original (BTI13 = ‘00’) 813 transaction sets and receive three consecutive 997 Functional Acknowledgement transaction sets where both the transaction set (AK501 = ‘A’) and the functional group (AK901 = ‘A’) acknowledgement codes show accepted (‘A’).

• Success for this phase of the testing process is determined to be:
  The participant’s ability to successfully submit multiple original (BTI13 = ‘00’) 813 transaction sets to their ExSTARS upload directory
• The participant’s ability to accept 997 Functional Acknowledgement transaction sets, translate those sets, and take appropriate actions, as needed, dependant on any errors that might have been identified within the 997 transaction set
• The ability of the IRS ExSTARS test team to receive original (BTI13 = ‘00’) 813 transaction sets from the participant’s upload directory that they can successfully open and translate and
• The generation of three consecutive 997 Functional Acknowledgement transaction sets by IRS ExSTARS where both the transaction set (AK501 = ‘A’) and the functional group (AK901 = ‘A’) acknowledgement codes show accepted (‘A’) for submitted original (BTI13 = ‘00’) 813 transaction sets.

Once this criterion has been met it is time to progress to the next step of end-to-end EDI system testing.

End to End System Testing

An end-to-end test cycle will include the 813 Electronic Filing of Tax Return Data original (BTI13 = ‘00’) transaction set and all other EDI transactions expected to occur in the normal production process, including the 997 Functional Acknowledgement transaction set, the 151 Electronic Filing of Tax Return Data Acknowledgement transaction set and the 813 Electronic Filing of Tax Return Data correction (BTI14 = ‘CO’) transaction set. End-to-end testing ensures thorough testing of all required EDI transactions.

This phase of the testing process will be used to verify that the structure/syntax remains consistent and that the data contained in the files submitted by the information provider/transmitter is sound.  The files will need to be compliant with EDI ANSI ASC X12 Version 4030 and the IRS ExSTARS Publication 3536 Excise Tax EDI Guide Version 2.0 guidelines.  The files may be derived from current, historical or self-generated information that is representative of a filing period. Data validity is checked during this phase.  Items such as validation of EIN numbers, TCN number, product group code, and state code abbreviation along with out-of-balance conditions, total net reported, and total net transported valuation will be checked.  Information providers should use actual EIN numbers.  Transmitters may utilize fictitious EIN numbers (e.g. all 9s), and these will create errors in the 151 Electronic Filing of Tax Return Data Acknowledgement transaction set that will be acceptable for testing purposes.

During this phase the electronic participant and the IRS ExSTARS test team will go through a minimum of two cycles of the following steps:

1. The participant will submit a complete test file (813 Electronic Filing of Tax Return Data original (BTI13 = ‘00’)) containing all data for an entire reporting period. The participant will also provide a paper report (using the 720 TO/CS summary forms provided with the test packet instructions) in order to summarize and verify the detail information in the EDI test file.  Instructions for sending the summary reports will be included in the LOA testing packet.
2. The IRS ExSTARS test team will return to the participant a 997 Functional Acknowledgement transaction set and a 151 Electronic Filing of Tax Return Data Acknowledgement transaction set. If there are no data errors identified in the 151 Electronic Filing of Tax Return Data Acknowledgement, the participant will be asked to resubmit another complete test file (813 Electronic Filing of Tax Return Data original (BTI13 = ‘00’)) containing all data for an entire reporting period with errors selected from the attached list of “EDI data errors for testing” provided with the test packet instructions. These errors will be identified in the 151 Electronic Filing of Tax Return Data Acknowledgement.
3. The participant will submit a test file (813 Electronic Filing of Tax Return Data correction (BTI14 = ‘CO’)) containing all corrected data for the errors identified in the 151 Electronic Filing of Tax Return Data Acknowledgement.  This assumes that one or both of the transaction set (AK501) and the functional group (AK901) acknowledgement codes do not show accepted (‘A’) and/or that the 151 Electronic Filing of Tax Return Data Acknowledgement BTA01 acknowledgement code does not show (‘AT’) accepted and that not all PBI02 action codes do not show (‘NA’) no action required.
4. The IRS ExSTARS test team will return to the participant a 997 Functional Acknowledgement transaction set and a 151 Electronic Filing of Tax Return Data Acknowledgement transaction set for the correction 813 transaction set.  The goal is for the 997 Functional Acknowledgement to contain both the transaction set (AK501) and the functional group (AK901) acknowledgement codes showing accepted (‘A’) and the 151 Electronic Filing of Tax Return Data Acknowledgement BTA01 acknowledgement code showing (‘AT’) accepted or all of the PBI02 action codes showing (‘NA’) no action required.  Steps 3 and 4 will be repeated at least once or until the desired results have been achieved.

Success for this phase of the testing process is determined to be:

• The participant’s ability to successfully submit original (BTI13 = ‘00’) 813 transaction sets and to identify and correct any errors identified by the IRS ExSTARS test team via  997 Functional Acknowledgement and 151 Electronic Filing of Tax Return Data Acknowledgement transaction sets.
• The participant’s ability to successfully submit corrected (BTI14 = ‘CO’) 813 transaction sets and to identify and correct any errors identified by the IRS ExSTARS test team via  997 Functional Acknowledgement and 151 Electronic Filing of Tax Return Data Acknowledgement transaction sets.
• The ability of the IRS ExSTARS test team to receive corrected (BTI14 = ‘CO’) 813 transaction sets and translate and process them into the ExSTARS system.
• The successful repetition of steps 1 through 4 as outlined above for two consecutive occurrences or to the point where both the participant and the IRS ExSTARS test team are satisfied with the results.

Once this criterion has been met it is time to progress to the next step. The IRS ExSTARS test team will assist the participant in moving to production, where there will then be a period of production data monitoring not to exceed 6 months.

Moving to Production and Data Monitoring

Information Providers and Transmitters must have completed the success criteria for the End-to-End Testing phase in order to move to begin submission of production filings in a monitored environment. At this time, Information Providers will be sent a notification that End-to-End testing was successful.  Acceptance is valid for the 720-TO and 720-CS electronic filing program only and will continue until and unless notified otherwise by the IRS.  

During this phase the filer will be submitting production data and the IRS Data Perfection Team will be monitoring the data content being filed for reasonableness and error levels and volume.  The participant will continue to submit summary 720TO/CS forms as outlined in test step 1 of the End to End System Testing phase. This will be done on a normal basis for the first two (2) to four (4) production filings.  Written notification from the IRS via mail or fax will be sent when production monitoring is completed, at which time Information Providers will no longer be required to submit summary 720TO/CS reports with their monthly electronic filings to ExSTARS.  Once past this point, the filers will be periodically reviewed on a random basis.  Error and data monitoring as a whole will be followed and if a trend of an increase in problems occurs or an identified problem occurs repeatedly the filer may be contacted to determine if assistance may be provided to help resolve the issue(s).

This phase may also be utilized by ExSTARS participants to test application files and software, user programs, EDI software, backup procedures, and exception processing by both the Information Provider/Transmitter and IRS. If an Information Provider or Transmitter desires to conduct additional testing that might be required due to internal information system changes, new transaction functionality, change of terminals being reported or other reasons after they have completed their Version 4030 End-to-End Testing phase, they should contact the IRS ExSTARS help desk at (859) 669-5352 (not a toll free telephone number) in order to initiate additional testing.  No test files will be accepted without this notification to the IRS ExSTARS help desk and a corresponding fax as outlined in Step 1 of the End-to-End Testing phase.

The P/T Indicator

The IRS will utilize the Test/Production indicator as part of the electronic file. This indicator can be found in the IRS EDI Guide. When filing a test file, you should set the ISA15 element to "T" for Test Data. When filing a production file, you should set the indicator to "P" for Production Data.

The following is a checklist of things you need to do to move from Test to Production status.

EDI Checklist

1. Obtain the most current IRS ExSTARS  Motor Fuel Excise Tax EDI Guide - Pub 3536 and Instructions to Forms 720-TO and 720-CS)
2. Complete and submit the appropriate Letter of Application (LOA)
   Optional attachments:
   • Form(s) 8821 for 6103(c) consent including list of state agencies.
   • Form(s) 8821 for Information Providers electing to use third-party  transmitters.
3. Receive the IRS response to your LOA application with the test packet documents and return the signed acknowledgement of receipt to the IRS.
4. Access the IRS ExSTARS website, as described in Phase 1, if applicable, for connectivity testing.
5. Complete the Phase 2 testing of compliance with ANSI ASC X12 syntax/structure and conformance with the ExSTARS EDI guide.
6. Complete the Phase 3 testing, confirming data and error correction ability.  Submit summary reports summarizing the contents of test files.
7. When you receive written notification from IRS that your company has successfully passed Phase 3 testing, change test indicator in ISA15 to “P” for Production Data.
8. Begin monitored production filings under the Phase 4 production and data monitoring.  Submit summary reports summarizing the contents of production files until written receipt from the IRS that production monitoring is concluded.  Summary reports will no longer be required after this notification.
9. Continue production submission of timely and accurate filings to ExSTARS.

 PHASE 3 – End-to-End Testing –EDI Errors for Testing
[Insert at least two data errors from each column in an original 813 (BTI13= ‘00’)]

ExSTARS EDI TESTING SCENARIOS

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