e-file for Large Business and International (LB&I) - Frequently Asked Questions - Tax Year 2019

 

Table of Contents to FAQs:

A

Modernized e-file, Benefits, and Overview

B

Corporations Required to e-file

C

Communication and General e-file

D

e-file for Corporations That Use a Tax Professional to Prepare Their Income Tax Return

E

e-file for Corporations Which Prepare Their Own Returns

F

Sources for Additional Information on Large Business and International e-file

Archived Guidance for prior year FAQs

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Return to: e-file for Large Business and International 

 

A. Modernized e-File, Benefits, and Overview

IRS e-file is the name for the electronic filing of tax returns. When a corporation e-files they send their income tax return data to IRS electronically instead of on paper forms. In 2004 IRS started a new e-file system for corporations, referred to as “Modernized e-File” (MeF) that is web-based, allowing electronic filing of corporate income tax returns through the Internet. MeF uses the widely accepted XML format, a standardized way of identifying, storing and transmitting data.

Certain corporations are required to e-file as explained in these FAQs. With few exceptions, all corporations that file TY 2017, TY 2018, and TY 2019 Forms 1120, 1120S, or 1120-F may file electronically.

IRS e-file is available to corporations that prepare and/or transmit their own returns and to those that rely upon a tax professional to prepare and/or transmit their returns.

The Corporate e-file Program does not accept and process the following corporate returns. Therefore, the corporation is excluded from the electronic filing requirement under TD 9363 unless otherwise noted.

  • Returns with tax periods ending prior to January 1, 2017
  • Returns covering multiple tax periods
  • Bank Holding Company Tax Act. Election to make installment payments for a portion of the total tax attributable to the Bank Holding Company Tax Act
  • Prompt Assessments

The following forms cannot be filed electronically as a return at the parent level:
Corporations required to e-file subsidiary returns for the following forms must file them in XML format. Refer to "Tax Year 2019 Directions to e-file" for additional information.

  • 1120-L Life Insurance Company
  • 1120-PC Property and Casualty

If the forms listed below are stand-alone filings (not part of a consolidated return), they must be filed in paper since the Modernized e-File (MeF) system does not process them at this time. However, if the following forms are part of a consolidated return, they may be attached in PDF format. They should be named appropriately and attached to the top-level consolidated return. See: Recommended Name and Descriptions for PDF Files Attached to MeF Business Submissions
 

  • 1120-C (formerly 990-C) Farmer's Cooperative Association
  • 1120-FSC Foreign Sales Corporations
  • 1120-H Homeowners Association
  • 1120-IC-DISC Interest Charge Domestic International Sales
  • 1120-ND Nuclear Decommission Trusts
  • 1120-REIT Real Estate Investment Trust
  • 1120-RIC Regulated Investment Companies
  • 1120-SF Settlement Funds 

The 1120X cannot be e-filed as a stand-alone return. It can only be submitted as an attachment to an 1120 return.

  • 1120X Amended Return 

Yes, IRS modified MeF programs so corporations can file income tax returns for:

  • 52-53 week
  • short period
  • final returns

The IRS worked with the Federation of Tax Administrators (FTA) and 28 state tax agencies to develop a fed/state electronic filing system for business tax returns filed on Modernized e-File. The system was implemented by the IRS in 2006. Check with your State tax authorities for specific information about state electronic filing options available to corporations.

 

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B. Corporations Required to e-file

Temporary Regulations issued January 11, 2005 and Final Regulations announced in TD 9363, which were implemented effective November 13, 2007, require certain corporations to electronically file. Those corporations with $10 million or more in total assets and that file 250 or more returns a year are required to electronically file their Form 1120, 1120S, and 1120-F.

All returns filed by a corporation or members of a controlled group of corporations during the calendar year are counted. The total is determined by aggregating all returns, regardless of type, that are required to be filed over the calendar year, including income tax returns, returns required under section 6033, information returns, excise tax returns, and employment tax returns. Corrected returns, amended returns, or forms filed with the 1120, 1120S, or 1120-F tax return, such as Form 5471, are not counted.

Example 1 - A corporation that files a consolidated return has 5 subsidiaries. Each subsidiary and the parent have 25 employees, one of the subsidiaries files100 Forms 1099, and another subsidiary files 3 Forms 720. The corporation filing the consolidated return is deemed to have met the 250-return threshold because:

  • Each of the 150 Forms W-2 is considered a separate return.
  • Each of the 6 Forms 940 are considered a separate return.
  • Each of the 24 Forms 941 are considered a separate return.
  • Each of the 100 Forms 1099 are considered a separate return.
  • Each of the 3 Forms 720 are considered a separate return.
  • The Form 1120 consolidated return counts as a separate return.

Example 2 – A controlled group as defined by IRC §1563(a) has 3 member corporations. All members file Form 1120S. Corporations A and C have 20 employees and Corporation B has 300 employees. Only Corporation B is deemed to have met the 250-return threshold since the concept of aggregation does not apply when a controlled group does not have at least 1 member who files Form 1120.

Example 3 – A controlled group, as defined by IRC §1563(a), has 5 members, 1 Consolidated C corporation, 2 non-consolidated C corporations, and 2 S corporations. The consolidated C corporation (Corp A) has 50 employees, 1 of the non-consolidated C corporations (Corp B) has 300 employees and 1 of the non-consolidated C corporations (Corp C) has 30 employees. 1 of the S corporations (S Corp D) has 300 employees and the other S corporation (S Corp E) has 200 employees. The aggregate number of returns filed for the controlled group is 910. The consolidated C corporation and both of the non-consolidated C corporations are deemed to have met the 250-return threshold because the concept of aggregation applies to all C corporations in a controlled group:

  • Each of the 880 Forms W-2 are considered a separate return.
  • Each of the 5 Forms 940 are considered a separate return.
  • Each of the 20 Forms 941 are considered a separate return.
  • Each of the 5 Forms 1120/1120S are considered a separate return.
Entity Actual Returns Filed Returns Deemed Filed Required to e-file
Corp A 56
  • 1 – 1120
  • 1 – 940
  • 4 – 941
  • 50 – W-2
910
Aggregation applies
Yes
Corp B 306
  • 1 – 1120
  • 1 – 940
  • 4 – 941
  • 300 – W-2
910
Aggregation applies
Yes
Corp C 36
  • 1 – 1120
  • 1 – 940
  • 4 – 941
  • 30 – W-2
910
Aggregation applies
Yes
S Corp D 306
  • 1 – 1120S
  • 1 – 940
  • 4 – 941
  • 300 – W-2
306
Aggregation does NOT apply
Yes
S Corp E 206
  • 1 – 1120S
  • 1 – 940
  • 4 – 941
  • 200 – W-2
206
Aggregation does NOT apply
No

The S corporation with 300 employees meets the 250-return threshold. The S corporation with 200 employees and the exempt organization do not meet the 250-return threshold since the concept of aggregation does not apply to Forms 1120S and 990.

Example 4 – A controlled group as defined by IRC § 1563(a) has 2 member corporations, a C corporation and a foreign corporation. The foreign corporation was required to file a Form 1120F because it had income, gains, or losses treated as if they were effectively connected with the conduct of a U.S. trade or business (ECI). The C Corporation files 245 returns and the foreign corporation files 7 returns. Both C corporation and foreign corporation meet the 250 return threshold because the concept of aggregation applies to all C corporations and foreign corporations in a controlled group as defined by I.R.C. § 1563(a), see Treas. Reg. § 301.6011-5(d)(3).

Example 5 – A controlled group as defined by IRC § 1563(a) has 2 member corporations, a C corporation and a foreign corporation that has no effectively connected income (ECI). Although it has no ECI, the foreign corporation is required to file a Form 1120-F return because it has U.S. source income and its tax liability was not fully satisfied by withholding of tax at source under section 3 of the Code. The C Corporation files 245 returns and the foreign corporation files 7 returns. Both C Corporation and foreign corporation meet the 250 return threshold. Although a foreign corporation that has no ECI under I.R.C. § 881 may fall under the definition of an "excluded member" under I.R.C. § 1563(b)(2), it is still a member of a controlled group of corporations as defined by I.R.C. § 1563(a) and Treas. Reg. § 301.6011-5(d)(3), and the foreign corporation would be required to aggregate its returns with those filed by the controlled group.

No, a controlled group, as defined by IRC §1563(a), does not include partnerships.  Returns filed by a related partnership are not included when determining if a corporation meets the 250-return threshold.

Yes, a corporation that meets the asset and return filing threshold and is a 52/53 week filer must file electronically

Notice 2010-13 provides that taxpayers can request waivers from the electronic filing requirement where the taxpayer can not meet electronic filing requirements due to technology constraints or where compliance with the requirements would result in undue financial burden on the taxpayer.  The notice also outlines the specific steps taxpayers should follow when requesting waivers from the IRS.

The answer depends on whether the corporation will use a tax professional to prepare their electronic income tax return or if the corporation plans to prepare their own electronic income tax return.

Corporations that plan to use a tax professional to prepare their electronic income tax return should check with them early and ensure they are IRS Authorized e-file Providers.  Also, these corporations should review the FAQs in section D of these FAQs.

Corporations that plan to prepare their own income tax returns should discuss the various electronic filing options with their software vendor as soon as possible and may need to take steps to register and complete the IRS e-file Application. Additional information for these taxpayers is in section E of these FAQs.

If a corporate taxpayer fails to file an income tax return on magnetic media when required to do so by regulations, the IRS may determine that the taxpayer has failed to file the return. The taxpayer then becomes subject to §6651 additions to tax, typically resulting in monetary penalties on the amount of underpayment. Additionally, any return not in compliance with the electronic filing requirement will be considered to not have been timely filed rendering any elections invalid. A separate penalty may apply to each Form 5471 which is improperly filed. These penalties will apply even if no tax is due on Form 1120.

The Service contacts taxpayers who report assets exceeding $10M and file 250 returns in a year.  We explain the electronic filing requirements to these taxpayers and work with them to subsequently electronically file if they are covered by TD 9363.  The Service will continue to monitor paper filing submissions and enforce the requirements of electronically filing.

No, the requirement to e-file under TD 9363 applies to Forms 1120, 1120S, or 1120-F.  Forms 7004 and the 94X family are not required to be e-filed.

The Modernized e-File system was enhanced to accept name change returns.  Taxpayers with a name change that are otherwise required to e-file must file electronically unless they have received an approved waiver.

Yes.  Since the notification to IRS of the name change would have resulted in a new Name Control (if applicable), there will not be a problem using the new name and new Name Control.  There is a possibility that the new Name Control has not been updated in the IRS system. If, for some reason, the e-filed return rejected for a Name Control/ EIN mismatch, and the EIN is correct, the filer should refile the return and check the “Name change” checkbox on the return.

If you are filing a current year return, mark the appropriate name change box of the Form 1120 type you are using:

  • Form 1120:  Page 1, Line E, Box 3
  • Form 1120S:  Page 1, Line F, Box 3
  • Form 1120-F: Page 1, Top Right "Name or Address Change" Box


If you have already filed your return for the current year, write to us at the address you find under the “Where To File” section of the form instructions to inform us of the name change.  In addition:

  • The notification must be signed by a Corporate Officer.
  • Articles of Amendment to the Certificate of Incorporation from the state that authorized the Corporation’s name change must be attached 

In some situations, a name change may require a new Employer Identification Number (EIN) or a final return.  See Publication 1635 (PDF), Understanding Your EIN, to make this determination.  If only the name is changing, you do not need a new EIN.

Yes, if the taxpayer is required to file electronically based on the regulations, then they must also electronically file their TY 2017, 2018 and 2019 amended and superseding returns.   A taxpayer must receive an approved waiver to file that particular return on paper. In Processing Year 2020, MeF will process TY 2017, 2018 and 2019 returns.  Only those tax years may be filed electronically in Processing Year 2020.  TY 2016 and prior returns cannot be filed electronically after December 26, 2019.  Any amended TY 2016 return must be filed on paper, since the MeF system can no longer process these returns.  No waiver is needed to file the amended TY 2016 on paper.

Yes, all short periods ending on or after November 13, 2007 are required to be e-filed if the taxpayer is required to file electronically based on the regulations.  A taxpayer must have received an approved waiver to file that particular return in paper.

Treasury Regulations § 301.6011-5(a)(1) and (f) provide that a corporation must e-file its Form 1120 if it is required to file at least 250 returns during the calendar year ending with or within its taxable year and it reports “total assets at the end of the corporation’s taxable year that equal or exceed $10 million on Schedule L of their Form 1120.”  For foreign corporations filing a Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, the foreign corporation can elect whether their Schedule L will include worldwide assets or limit it to U.S. connected assets. See Treasury Regulations. § 1.6012-2(g)(1)(iii).

Because Treasury Regulation §  301.6011-5(f) refers to total assets that equal or exceed $10 million on Schedule L, and Treasury Regulation § 1.6012-2(g)(1)(iii) gives the Form 1120-F filer an election to include only U.S. connected assets on Schedule L, the $10 million threshold determination is based on what the foreign corporation elects to report on its Schedule L.

Accordingly for purposes of determining the $10 million threshold for purposes of the corporate e-filing mandate, foreign corporations filing a Form 1120-F will be mandated to e-file their Form 1120-F if their Schedule L assets equal or exceed $10 million, and the $10 million threshold is determined based on the foreign corporation’s U.S. connected assets if the foreign corporation elects to complete its Schedule L based on its U.S. connected assets consistent with Treasury  Regulation § 1.6012-2(g)(1)(iii).

Treasury Regulations § 301.6011-5(a)(1) and (f) provide that a corporation must e-file its Form 1120 if it is required to file at least 250 returns during the calendar year ending with or within its taxable year and it reports “total assets at the end of the corporation’s taxable year that equal or exceed $10 million on Schedule L of their Form 1120.”  The requirement to e-file is based on the number of returns and dollar threshold during the taxable year.  Since the total assets of the corporation dropped below $10 million in 2019, the corporation is not required to e-file the 2019 return.  If the total assets of the corporation is over $10 million in 2019 and the corporation is still required to file at least 250 returns during the calendar year, then the corporation would be required to e-file their corporate return for TY 2019.

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 C. Communication and General e-file

The answer depends on if the corporation uses a tax professional to prepare their income tax return or if the corporation prepares their own income tax return.

If the corporation uses a tax professional to prepare the income tax return, it does not need special software to file electronically.  The corporation’s tax professional will need to use software approved for electronic filing and also be an IRS Authorized e-file Provider.  Taxpayers should check with their tax preparer early to ensure they are ready to file their electronic income tax return. These taxpayers should also review section D of these FAQs.

Corporations that purchase tax preparation software and prepare their own income tax return should discuss the various electronic filing options with their software vendor as soon as possible. They should also review the additional information in section E of these FAQs.

You should discuss the preparation of your electronic return with your tax professional and/or your paid preparer.  If they are an IRS Authorized e-file Provider and use the same software used by your corporation to prepare the return, they may be able to “originate” your electronic return.   If the tax professional uses a different software package, you will need to follow the procedures in Publications 4163 (PDF) and 4164 (PDF) to “originate” your electronic return.

You will be required to purchase software approved for electronic filing, develop your own software, or use an IRS Authorized e-file Provider to prepare your electronic return.  If you choose to develop your own software, you should contact the e-help Desk and review Publication 4164 (PDF).  Additionally, the software must be approved by the IRS before it can be used to file an electronic return.

Yes, MeF can only process electronic income tax returns if the entire return is transmitted to IRS in one file.  Some software vendors have developed tools to “aggregate or merge” files as outlined in your example.  You should discuss your situation with both of your software vendors.

The preparer, ERO, or a transmitter must provide a complete copy of the return filed with the IRS to the taxpayer.  This can be in any media, including electronic media that is acceptable to both the taxpayer and the preparer, ERO, or transmitter.  A complete copy of a taxpayer's return consists of the electronic portion of the return, including all schedules, forms, PDF attachments, and jurats, filed with the IRS.  The copy provided to the taxpayer must include all information submitted to the IRS to enable the taxpayer to determine what schedules, forms, electronic files, and other supporting material has been filed with the return.  The copy, however, need not contain the taxpayer identification number of the paid preparer. The electronic portion of the return can be contained on a replica of an official form or on an unofficial form. On an unofficial form, however, data entries must be referenced to the line numbers or descriptions on an official form. The preparer, ERO, or transmitter should advise the taxpayer to retain a complete copy of the return and any supporting information.

A superseding return is a subsequent return filed within the filing period (including extensions). A superseding return is considered the return of record because it takes the place of any other return previously filed during the filing period, with extensions.

An amended corporate return is a subsequent return filed after the expiration of the filing period (including valid extensions).

MeF can process multiple electronic income tax returns for the same EIN and tax period.  A taxpayer filing a superseding return must indicate the return is such by selecting the Superseded Return checkbox designation in the software.

  • Additional information on filing amended and superseding returns may be found at e-file for Large Business and International.  The instructions relating to Amended and Superseding Returns are specific to each tax year.  Go to the link for the tax year you need to update.

Under Code Section 404(a)(6), if the taxpayer files before the due date of the return (with extensions), so long as the deduction is on the return, the taxpayer has until the due date to make the contribution. The actual cite is:

Code Sec. 404. Deduction for contributions of an employer to an employees' trust or annuity plan and compensation under a deferred-payment plan.

(a) GENERAL RULE

(6) TIME WHEN CONTRIBUTIONS DEEMED MADE

For purposes of paragraphs (1), (2), and (3), a taxpayer shall be deemed to have made a payment on the last day of the preceding taxable year if the payment is on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof).

Once a tax return has been e-filed, it is considered the return of record.  Documents that were not attached when the return was e-filed cannot be considered as part of the return.  There is no process to associate forgotten or missed documents with an electronic return.  If a taxpayer feels that the missed or forgotten items are material enough to warrant sending to the IRS, then an amended or superseding return should be filed. Taxpayers may use MeF to file amended or superseding returns.

No, you no longer need to send a duplicate paper copy of Forms 5471, 5472, and 5713 if you electronically file the original form.

Your software should provide an "OtherRefundableCreditsSchedule”.  This schedule will allow you to itemize the additional credits and provide fields for Description, Explanation, and Amount.  The sum of the additional credits will be included in the amount on Form 1120, Line 32(f).  Taxpayers should contact their software developer to determine how this schedule can be completed in your software package.

If a taxpayer needs to attach statements providing additional information or clarification, these documents should be attached directly to the return.  The file should be in PDF format, the Description field should be something explanatory like "Explanation of Withholding from Schedule K-1", “Explanation of Withholding from Form 1099-G”, etc  and the file should be named something like "ExplanationOfWithholdingFromScheduleK-1.pdf", "ExplanationOfWithholdingFromForm1099-G.pdf", etc. This will alert the processing units that additional clarification to supplement the return information is available and how to easily identify this attachment.

No. Under Revenue Ruling 77-339, 1977-2 C.B. 475, once an elected amount is credited as a payment of estimated tax for the succeeding year, it loses its character as an overpayment for the year in which it arose. IRS cannot offset a credit elect against any subsequently determined tax liability.  Once a credit elect is applied, it is irrevocable.

No. The Form 8453-C, U.S. Corporation Income Tax Declaration for an IRS e-file Return, and the Form 8879-C, IRS e-file Signature Authorization for Form 1120, contains representations tailored to an electronically filed corporate income tax return.  The Form 8453-C declares that the corporate officer has given the electronic return originator, transmitter or intermediate service provider information that corresponds with the numbers on the Form 8453-C, and that it was true and correct.  The Form 8879-C declares that the corporate officer examined the copy of the corporation's electronic income tax return and that it was true and correct.

Consequently, it is improper when filing a paper Form 1120 to either use the Form 8453-C or Form 8879-C to sign the paper return.  These forms do not properly make declarations that are appropriate for a filed paper return.  In cases where the purported e-file return has not been accepted, no signature or signature alternative has been accepted or retained by the IRS. Accordingly, a paper return must be signed on the return to comply with the signature requirement under Code Sections 6061 and 6062.

Additional guidance can be found in Publication 4163 (PDF) under the heading “Transmission Perfection Period” in the event that you must paper file a return which is otherwise required to be electronically filled.

Treas. Reg. §301.7502-1(d)3(ii) provides that the term electronic postmark means a record of the date and time (in a particular time zone) that an authorized electronic return transmitter receives the transmission of a taxpayer's electronically filed document on its host system. However, if the taxpayer and the electronic return transmitter are located in different time zones, it is the taxpayer's time zone that controls the timeliness of the electronically filed document.

Based on the regulations, the Electronic Postmark is adjusted to the taxpayer’s time zone – the ERO is not mentioned in Treas. Reg. § 301.7502-1(d)(3)(ii).

If you would like to include an explanation of the short period return and/or related information, you should include this information in a PDF file attached to the return.  The Description field should be “Short Period Return” and the file should be named “ShortPeriodReturn.pdf”.   This file should be attached at the top consolidated return level.  The file name may contain up to 64 characters if you would like to include more detail in the name of the file, such as the corporate name.  

If you would like to include an explanation, you should include this information in a PDF file at the top consolidated return level.  The Description field in the XML should be “Intent To File Superseding Return Explanation” and the PDF file should be named ““IntentToFileSupersedingReturnExplanation.pdf” . The file name may be modified to contain up to 64 characters, if you would like to include more detail in the name of the file, such as the corporate name.

In general, if there are no issues that cause downstream processing problems, a corporation can expect to see their refund at least one week earlier than a corporate return filed on paper.

If a form is revised within the taxpayer’s taxable year, they must use the revised form.  For example, using the above dates for the form revision, if the tax year of the taxpayer ends in March 2020, then the taxpayer should use the Form XXX version February 2020. In the case of a fiscal year taxpayer whose year ends November 30, 2019 that taxpayer would use the old version of the form.  Taxpayers should contact their software developer to find out what revision of the form they are supporting.  Taxpayers should also check the latest Known Issues file to find out if the IRS has any special instructions in case the latest revision of the form is not available in the schema package for the tax year the filer needs to file

The General Dependency was created to allow for the submission of information that is not specified in a predefined schema.  Beginning in Processing Year 2010, there are three General Dependencies:

  • "GeneralDependency", available for Forms 1120, 1065 and 1065-B, is attached at the return level and allows for an explanation of up to 1,000,000 characters (efile type is LongExplanationType).
  • "GeneralDependencyMedium", available for Forms 1120-F, 1120S, 720, 2249 and 8849, is attached at the return level and allows for an explanation of up to 100,000 characters (efile type is MediumExplanationType).
  • "GeneralDependencySmall" is attached at the form or schedule level and allows for an explanation of up to 5,000 characters (efile type is TextType with maximum length 5,000 characters).  See FAQ C32 above for a situation that requires the use of the The General DependencySmall is available for:
     
Form 851 Form 4562
Form 926 Form 4684
Form 5471 Form 1118
Form 1118AMT Form 5713
Schedule M-3 (Form 1120) Form 6765
Schedule M-3 (Form 1120L) Form 8586
Schedule M-3 (Form 1120PC) Form 8834
Schedule M-3 (Form 1120S) Form 8865
Schedule M-3 (Form 1065) Form 8886
Schedule K-1 (Form 1065) Form 4136

 

 

Revenue Procedure 2009-52 states that the taxpayer that filed its federal income tax return for the taxable year of the applicable NOL may make the election by attaching a statement to its original or amended return for the taxable year of the applicable NOL.
A corporation that is filing their return electronically may create a General Dependency and enter WHBA-Rev Proc 2009-52 in the description field.  Provide the statement “XXXX NOL Carryback Election Pursuant to Rev. Proc. 2009-52” (where XXXX is the year), and include the information in the three bullets above.

If you e-filed your original return and are now filing a paper amended return, you should send it to the campus where you would have filed the original (based on the form instructions), had it been filed on paper.  For example, if the corporation's principle business office is located in Michigan and your total assets at the end of the tax year are less than $10 million and you are not required to file Schedule M-3, then you were required to file at the Cincinnati Campus. Therefore, you should state Cincinnati Campus on your amended return.

If you are required to e-file under T.D. 9363, you are also required to e-file any amended returns.

No. An employee who prepares his employer’s returns is not required to sign as a paid preparer. Accordingly, unless the employee prepares other federal tax returns for compensation, he or she is not required to register and obtain a PTIN.

For additional information on New Requirements for Tax Return Preparers

You should provide the client with a copy of the return for review and signature in a format and media agreeable to you and the client (XML version, paper version, pdf of paper version etc), along with the Form 8879 for the client to sign and return to you.  You, as the preparer, should retain a copy of the return finally approved and signed by the client using the Form 8879.  The copy of the return provided to the client and retained in the preparer's records is not required to include the preparer's signature.   See Treas. Reg. § 1.6695-1(b)(2). Only the return electronically filed with the IRS is required to be signed by the preparer.  Treasury Regulation section 1.6107-1(a) provides in part:

(a) Furnishing copy to taxpayer--(1) A person who is a signing tax return preparer of any return of tax or claim for refund of tax under the Internal Revenue Code shall furnish a completed copy of the return or claim for refund to the taxpayer (or nontaxable entity) not later than the time the return or claim for refund is presented for the signature of the taxpayer (or nontaxable entity). The signing tax return preparer may, at its option, request a receipt or other evidence from the taxpayer (or nontaxable entity) sufficient to show satisfaction of the requirement of this paragraph (a).

(2) The tax return preparer must provide a complete copy of the return or claim for refund filed with the IRS to the taxpayer in any media, including electronic media, that is acceptable to both the taxpayer and the tax return preparer. In the case of an electronically filed return, a complete copy of a taxpayer's return or claim for refund consists of the electronic portion of the return or claim for refund, including all schedules, forms, pdf attachments, and jurats, that was filed with the IRS. The copy provided to the taxpayer must include all information submitted to the IRS to enable the taxpayer to determine what schedules, forms, electronic files, and other supporting materials have been filed with the return.

In addition, you should retain a copy of the completed Form 8879 in your files for three years from the return due date or the date the IRS received the return, whichever is later.  Do not send a copy of the completed Form 8879 to the IRS unless requested to do so.
 

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D. e-file for Corporations That Use a Tax Professional to Prepare Their Income Tax Return

If your corporation uses a tax professional to prepare the entire income tax return there should be minimal impact.  You should check with your tax professional to ensure they are an IRS Authorized e-file Provider and discuss their responsibilities to “originate” your electronic return.  You should also ensure that your tax professional uses software that fully supports your e-file requirements.  Your Corporate Officer will also sign the electronic return using the appropriate Form 8453 or Form 8879.
IRS requires the entire electronic return to be sent to IRS in one electronic file.  As a result, some of your internal tax preparation processes may change.  You should discuss the preparation of your electronic return with your tax professional and they should be able to assist you.
 

The requirement for certain large corporations to e-file is the responsibility of the corporation.  Within this requirement is your need to use software that complies with IRS published guidance.  The published guidance allows some latitude in specific filing situations.  Your return needs to be prepared and filed using approved software that fully supports your specific filing situation consistent with this published guidance.

 

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E. e-file for Corporations Which Prepare Their Own Income Tax Return

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).

 

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:

  • Electronically sending the return to a transmitter who will transmit the return to the IRS;
  • Directly transmitting the return to the IRS; or
  • Providing a return to an Intermediate Service Provider for processing prior to transmission to the IRS.

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.

 

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 (PDF) on applicants that prepare returns for profit.

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 2019 Directions for Corporations Required to e-file.

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.

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.

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 (PDF).

 

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F. Sources for Additional Information on Large Business and International e-file

Yes. The IRS updates this e-file for Large Business and International web page with new information as it becomes available. Check back regularly for updates.

  • Corporate taxpayers can contact the e-help Desk at 1-866-255-0654 for assistance with inquiries.
  • Taxpayers with account or tax law questions may call 1-800-829-4933.
  • Tax practitioners with account or tax law questions may call 1-800-829-8374.
  • Tax Practitioners or Software Developers should contact the e-Help Desk at 1-866-255-0654 for assistance with inquiries.

While individual responses may not be possible due to the volume of questions submitted, IRS will post answers to frequently-asked e-file questions on this web site.
 

Since the e-file requirements were issued, IRS officials have been holding regular meetings with representatives from key external stakeholder groups (TEI, ACT, and AICPA) to discuss e-file requirements and administrative processes.  These meetings will continue.

Interested parties may also subscribe to e-news-subscriptions to receive email alerts to new e-file developments affecting Large Business and International.

The best source of information during actual return preparation will be your software vendor. Publication 4163 (PDF) is also a good source of information.  The IRS e-Help Desk at 1-866-255-0654 can answer basic questions about electronic filing but cannot assist with return preparation.

 

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