Electronic Filing of Tax Returns and E-Services
2005 - The evolution of computer technology has revolutionized
interaction with the IRS. It is estimated that by 2007 as
many as 80% of all returns will be filed electronically. In
pursuit of this goal, the IRS is marketing its electronic
products and services to tax preparers and companies. The
IRS website, www.irs.gov, contains a wealth of information
on these programs.
first step to electronic filing is to register with the
IRS by filing Form 8633, Application to Participate in the
IRS E-file Program. Preparers can file Form 8633 online.
Individuals, not companies, register with the IRS to e-file
tax returns, including information returns, can be filed
electronically. These returns include individuals, first
and second individual extensions, corporations, partnerships,
and most exempt organizations. Before electronically filing
a tax return, the taxpayer must sign Form 8878, the signature
form. Notification of acceptance or rejection of the tax
return is usually given within two days after submission.
If for any reason the IRS rejects the tax return, it can
be corrected and resubmitted. The tax return filing date
is the date of the e-filing.
an outgrowth of e-filing, the IRS has expanded its e-services
to include disclosure authorization and the Electronic Account
Resolution, new online tools that give tax professionals
additional ways to work with the IRS.
authorization. Eligible tax professionals
can complete authorization forms, view and modify existing
forms, and receive acknowledgement of accepted submissions,
all online. Disclosure authorization (DA) allows tax professionals
to electronically submit Form 2848, Power of Attorney, and
Form 8821, Tax Information Authorization. These authorizations
provide for convenient electronic signature by taxpayers,
which allows a tax preparer to act more quickly on behalf
of a client.
account resolution. EAR allows tax professionals
a secure method of electronically corresponding with the
IRS and inquiring about specific account problems. Account-related
questions or problems about refunds, installment agreements,
assessments, or missing payments can be resolved by IRS
representatives after EAR verifies that the tax professional
has authority to represent the taxpayer. The IRS response
is delivered to an electronically secure mailbox within
three business days, and the tax professional is notified
basic e-services available to tax professionals are:
Online registration to use other e-services.
Electronic applications for a preparer tax identification
number (PTIN). PTIN numbers are used in place of the preparer’s
Social Security number on tax returns.
tax identification number (TIN) matching allows payee
and agents submitting information returns to match up
to 25 payee TIN and name combinations against IRS records.
This is a prefiling service and is available for Forms
1099-B, 1099-INT, 1099-DIV, 1099-PATR, and 1099-MISC.
Bulk TIN matching allows payers and agents that file 1099s
to match up to 100,000 TIN and name combinations against
IRS records within 24 hours.
approved IRS partners, such as e-filing tax professionals
and taxpayers, are eligible to use e-services. They are
available 24 hours a day, seven days a week. The only caveat
is that the disclosure authorization and EAR services are
currently available only to tax professionals that successfully
e-file 100 or more individual tax returns.
Federal Tax Payment System
that have been paying penalties on late filings of Form
941, Employer’s Quarterly Federal Tax Return, can
obtain a refund on penalties by enrolling in the Electronic
Federal Tax Payment System (EFTPS). An employer enrolls
in EFTPS by either going to the EFTPS website (www.eftps.gov)
or calling 800-555-4477 to receive an enrollment form. The
employer must make timely deposits for four quarters. The
federal tax deposit should be called into the EFTPS program
at least one business day before the deposit is due; the
funds are withdrawn the next business day. After four quarters
in the program, the IRS will look back to see if there were
any penalties in the four preceding quarters. If so, the
IRS will refund the deposit penalty charged and paid (minus
any offsets for outstanding taxes).
IRS is launching a new service to make technical guidance
available via e-mail to tax professionals whenever documents
the IRS’ GuideWire list server, subscribers will receive
notification of, and links to, IRS announcements, notices,
revenue procedures, and revenue rulings as they are issued.
Tax preparers can subscribe to the list server through the
IRS, at www.irs.gov.
The IRS also sends out a weekly summary of technical guidance
to subscribers of its Digital Dispatch service.
Berger, CPA, is a tax principal at Weinick, Sanders,
Leventhal & Co. LLP, New York, N.Y.