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e-file Status Report #2014-06

Yesterday evening, 4/28/2015, 5:56 pm, we received official e-mail confirmation from the IRS that we have successfully completed our 2014 software testing for Form 1041.

State e-file (NJ, NY, PA)
We are now moving on to work on these three states.

Concern Over Potential IRS Notices, etc.
Several customers expressed concern that beneficiaries who file 1040s based on K-1s that are not yet on record with the IRS might start to receive “mismatch” notices. We raised this issue two weeks ago with the IRS, and yesterday received a definitive answer from a Supervisory Tax Analyst. He pointed out that the IRS receives hundreds of thousands of 1041s filed on or before the 9/15 extension date. He added the following: “There is no indication of notices issued from corresponding 1040 filings (filed before corresponding 1041/K-1) from that same tax year on the…K-1 issue described by your customer.”

We hope that this alleviates any concerns that you might have had on this issue.

This makes it clear that it will not matter whether you e-file your 1041s tomorrow, Friday, next week, or the week after. Our current plan is to continue polishing the 1041 e-file software for release sometime next week. Although we cannot predict how long it will take to go through the state approval process for NJ, NY, and PA, we expect it to be far faster than the 1041 process was. You will be able to e-file your 1041s upon installation of the next 6-in-1 release, then e-file the corresponding state returns with a later release. You may still choose to “link” the state return to the federal return even though it is being e-filed at a later time.

If you prefer to wait until the state e-file software is ready, then you may e-file both at the same time. Although they will technically be separate submissions (even if linked), the software will e-file both returns with the IRS at the same time (unless you choose not to e-file the state return).

IRS Test Scenarios
This five required IRS Test Scenarios covered the following forms, schedules, and attachments:

Forms and Schedules
1041, 1041 Schedules D, I, K-1
1040 Schedules C, E, F
Forms 4562, 4797, 4952, 6781, 8949, 8960
Form 8453-FE (although part of the testing process, 6-in-1 will be supporting only the simpler Form 8879-F Practitioner PIN Method of authorizing e-file)

Grantor-Type Trust Income and Deduction Statement (“Grantor Advice Letter”)
1041, Line 8 Income
1041, Lines 10-15c, Tax-Exempt Expense Allocation Statement
1041, Line 15a, Deductions Other
1041, Line 19, Estate Tax Deduction with IRD Computation Statement
1041, Page 2, Other Information, Line 5, Interest Paid on Seller-Provided Financing Statement

IRS Payment

Schedule K-1, Line 5, Net Rental Real Estate Income Explanation
Schedule K-1, Line 7, Ordinary Business Income Explanation
Schedule K-1, Line 10, Estate Tax Deduction Explanation

In addition, the following forms and attachments (not part of the Test Scenarios) may also be submitted as part of 6-in-1 e-file:

Form 1116
Form 6252

e-file Options screen
Form 8582 (check box)
Preparer’s Note
Election Explanation
Regulatory Explanation
706 Waiver of Deductions claimed on 1041

Section 645 Election

There are dozens of additional statements that could be attached to various lines on the forms and schedules. If you encounter a condition that requires such an attachment, please let us know.

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