E. e-file for Corporations Which Prepare Their Own Income Tax Return
|E1||If a corporation required to e-file prepares its own return, what extra steps are required in order to comply with the requirements to file an electronic return?||Your corporation should be aware of the issues discussed in Section C of these FAQs, “Communication and General e-file”, and then determine if you meet the IRS definition of “Large Taxpayer”.|
|E2||What is the IRS’s definition of a “Large Taxpayer”?||For purposes of electronic filing, the IRS defines a “Large Taxpayer” as a business or other entity with assets of $10 million or more, or a partnership with more than 100 partners, which originates the electronic submission of its own return(s).|
|E3||How does a Large Taxpayer “originate” the electronic submission of its own returns(s)?||After a Large Taxpayer completes the preparation of their corporate income tax return, tax preparation software approved for electronic filing will provide the necessary instructions to “originate” the electronic submission of the return and authorize the filing of the return via IRS e-file. During this process, the electronic return data is converted into the format defined by IRS for electronic filing.
According to Publication 3112 (pdf), Application and Participation in IRS e-file, the taxpayer originates the electronic submission of a return by:
|E4||Are Corporate Officers or Principals of the firm required to complete the registration and application process required for “Large Taxpayers” to participate IRS e-file?||No. Corporations meeting the definition of Large Taxpayer may assign a “Responsible Official” who will complete the online registration and application process. The Responsible Official is not required to be a Corporate Officer or a Principal of the firm. IRS recommends that corporations have 2 or more “Responsible Officials” listed on their e-file Application in the event that the “Responsible Official” is unavailable and IRS needs to contact them regarding the e-file process of the corporation’s tax return.|
|E5||If a corporation meets the definition of “Large Taxpayer,” will IRS perform the suitability checks discussed in Publication 3112 (pdf)?||No, these suitability checks are not performed on the Responsible Official, Delegated Official, Corporate Officer, or Principals of entities meeting the definition of a Large Taxpayer since they are required to e-file their return and do not prepare returns for profit. IRS only performs the suitability checks discussed in Publication 3112 on applicants that prepare returns for profit.|
|E6||How does a corporation submit the attachments, explanations, etc. required by the Form 1120/1120S/1120-F instructions and the additional information required by IRS regulations?||In all situations where you are asked to provide supporting data, an explanation, or a description, the software should prompt you for the necessary information and automatically create the proper “supporting data”. This is referred to as a “structured” attachment. In situations where the data cannot be entered into the software (such as an appraiser statement), you will be allowed to scan the documents and send a PDF file attached to the electronic return. In addition, the Form 1120/1120S/1120-F software includes a General Dependency Schema that may be used to send other information. Additional information can be found in Tax Year 2018 Directions for Corporations Required to e-file.|
|E7||How does a Corporate Officer “sign” an electronic return that they are transmitting directly to the IRS?||Large Taxpayers who file their return directly with IRS must use a Form 8453 signature document. After the Form 8453 is signed by the corporate officer, the form must be scanned and saved in PDF format. The PDF file is then attached to the electronic return.|
|E8||What additional information is available for corporations that prepare their own returns?||Corporations that prepare their own return should review Publication 4163 .|
|E9||Our corporation has many subsidiaries that file as part of our consolidated return, but we also have non-consolidated subsidiaries, brother/sister, and other business related corporations for whom we prepare and file returns. Do I need a different EFIN and/or ETIN for those corporations or can I use the one I received for our corporation?||You may e-file the returns for all corporations who fall within your “business” controlled group. The EFIN and ETIN are IRS’ approval for you to e-file (EFIN) and transmit (ETIN) returns and that includes “sister”, “brother”, or “related” corporations for whom you would normally prepare and submit returns as part of your business processes.|
|My corporation will be filing an 1120-F return. We are planning on preparing and transmitting our own return. Do we need to create an IRS e-file Application?||
Yes. If you decide to originate and transmit your own return, you will need to create an IRS e-file Application. There are step-by-step instructions that walk the Large Taxpayer through the process of creating their IRS e-file Application.