Tax Return Preparers
Modernized e-File to Modify Return Processing
In our continuing efforts to strengthen protections against identity theft refund fraud, the IRS will be making some modifications to the way tax returns are processed through Modernized e-File (MeF). MeF has always used the “Reject and Stop” business rule severity to limit what information is returned in a rejected Acknowledgement. Starting January 1, 2016, new business logic will be used to further limit the information returned in a reject Acknowledgement in some situations. This applies only to electronically filed (e-file) 1040 family tax returns.
These measures should not alter your current business models. Tax returns will continue to be rejected when errors are identified and they will need to be corrected before the tax return can be re-submitted. On resubmission the tax return may be rejected for additional errors which will need to be corrected. This correction and re-submission process is no different from what tax preparers currently experience and will continue until the tax return is accepted. It is anticipated that only a small percentage of tax returns will need to be re-submitted more than once, in order to resolve all of the errors associated with the tax return.
Tax Return Preparers can improve the taxpayer experience and minimize the correction process by taking the following actions to protect their clients:
- Ensure that all documentation necessary to fill out return has been gathered.
- Submit the taxpayer’s tax return using Forms W-2, W-2G, and 1099-R supplied to the taxpayer by their employer or financial company. Refrain from using “pay stubs” or “earnings statements” which could cause delays in processing.
- Insist on identification and documentation of social security and other identification numbers for all taxpayers and dependents.
- Exercise care in the entry of tax return data into tax return preparation software and carefully check the tax return information before signing the tax return.
- Don’t submit tax returns claiming dubious items or with altered or suspicious documents.
- Ask taxpayers if there were problems with last year’s tax return. If there were, see if the conditions that caused the problems have been corrected or can be avoided this year.
- Use only other Authorized IRS e-file Providers to perform IRS e-file activities, including but not limited to origination and transmission of electronic submission. A Provider can print a summary of its e-file application via e-Services at IRS.gov and provide it to other Providers as needed.
- Cooperate with the IRS’ efforts to monitor Providers and investigate electronic filing fraud and abuse.
Please refer to Publication 1345 Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns and Publication 3112 IRS E-File Application and Participation for additional actions software developers can take to improve the taxpayer experience and minimize the correction process.
Return to the Coming Soon to the Modernized e-File (MeF) Program page