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e-file Status Report #2014-24

(note one correction in #16 and one addition in #21 below, added on 8/20/2015)

Version 2015-231 just posted. We are looking for one or two firms to download this version and submit several returns (federal and state). Once we have confirmed that these returns have been accepted, we will notify all users that this 6-in-1 (with any necessary adjustments) is available for e-filing any and all 1041s and NJ/NY/PA returns.

To date, 56 firms have e-filed over 1,350 returns (1041, NJ, NY, and PA).

Listed below are various questions and issues that have arisen in connection with Modernized e-file (“MeF”), together with answers and solutions:

1) MeF can now be filed year round (no longer an October 20 deadline for the year).

2) MeF 1041 can now be filed for any year end (not just 12/31 through 6/30).

3) You will be able to e-file 1041s for the current year and two prior years (as long as they were supported in MeF).

(a) 2015: e-file 2014 returns
(b) 2016: e-file 2015 and 2014 returns
(c) 2017: e-file 2016, 2015, and 2014 returns

4) You should be able to e-file a 2015 short-year return using the 2014 MeF “schema” (until the 2015 schema become available). We are working on implementing that feature of MeF.

5) You can amend your 1041 by checking the “Amended return” box on Page 1, then resubmitting.

6) Pennsylvania is still limited to calendar years and short years that end on 12/31.

7) MeF is now completely electronic. No more mailing of additional documents with Form 8453.

8 ) Data for the following forms and schedules is transmitted electronically with the return: 1041, D, I, K-1, 1040 C/E/F, 1116, 4562, 4797, 4952, 6252, 6781, 8582, 8949, 8960

9) Data for the following statements is transmitted electronically with the return: L15a Deductions; L19 IRD; 706 Waiver; Grantor Advice Letter; L15b NOL; 645 Election; Allocation of Expenses between Taxable and Tax-Exempt; Line OI-5 Interest Paid (1041, Page 2); K-1 additional description for Lines 5, 7, 10; Preparer’s Note; Election Explanation; Regulatory Explanation; IRS Payment

10) All other documents to be included with the 1041 should be scanned to PDF format, then added to the return via the e-file Center (“More…” link in upper right, then PDF tab)

11) Certain missing data will cause returns to be rejected. We have added a “Missing Data” tab in the upper right of the e-file Center for the fields that are the most common causes of rejected returns:

(a) Grantor Name: The “Name Control” field is based on values in the Decedent/Grantor name fields (mostly last name). The first name is used for trusts that filed for an EIN online and have an EIN that starts with 20, 26, 27, 45, 46, or 47.

(b) Fiduciary Name: both Last and First required

(c) Fiduciary Zip Code

(d) EFIN: In this year’s transition from Legacy to MeF, our software did not preserve the firm’s EFIN. A missing EFIN will cause a “Failed” message. The EFIN needs to be entered only once, and will be used for every return e-filed thereafter. Enter this on the 8879-F screen for any 1041 (lower right panel), or in the e-file Center (“More…”, “Firm Data” tab).

12) The statements listed above in #9 must be attached in a specific order. The software now uses this specific order, and returns will no longer be rejected because statements were attached in a different order.

13) Sale transactions: the acquisition date is required. Returns that are missing the acquisition date (or “Inherited” or “Various”) will be rejected.

14) Our server has a timer that sends all unsent returns every 30 minutes, and checks the IRS computer every 30 minutes for results. In the July versions of the software, you needed to click on one of the Get Status buttons to get these results. Now, the software will automatically check the status for all pending returns every time that you navigate to the e-file Center.

15) For an Estate/Trust combined return (based on a Section 645 election), the software will now include transactions from both the estate and any connected trusts. Previously, the software was not picking up sale transactions with 8949 results (one of Boxes A-F selected) from the trust Transaction records, thus causing a rejection.

16) If the estate is a fiscal-year filer, then you file:

(a) one 1041 for the estate/trust combination (e-file)
(b) one PA-41 for the estate (paper file, because PA does not support fiscal-year returns)
(c) one PA-41 for each trust (paper file, because PA allows trusts in this case to use the same fiscal year used by the estate, and PA e-file does not support fiscal-year returns) (CORRECTED on 8/20/2015).

17) Approximately 20 of the 1,350 returns have returned an “SDK” error (“Software Developers’ Kit”). After several weeks of trying to reach IRS Level Two support, we learned that this was a known issue with the IRS SDK v5.1. We received a CD from the IRS in yesterday’s mail with SDK v5.3, and hope to have the issue resolved within the next 48 hours. We will notify firms when they can resubmit these returns without getting the SDK error.

18) If you will not be e-filing a 1041 but need to e-file a PA-41, Shift-Click on the “Link” checkbox (e-file Center, list of estates/trusts in the left 60% of the screen) to uncheck it. Then e-file the PA-41.

19) Certain characters in certain fields were causing returns to be rejected: carriage returns, ampersands, apostrophes, slashes, double spaces, and trailing spaces. The software has been modified to remove these characters where appropriate, so that returns should no longer reject for this reason.

20) Approximately 10 returns have been rejected because the IRS computer thinks that they have already been e-filed. We are checking with the IRS for the actual status of these returns.

21) PA-41 Extended Returns (no tax due): even though the instructions specify that a federal 7004 extension request should be attached to any PA-41 that is e-filed on extension, the PA Department of Revenue has informed us that this is not required. ADDITION (8/20/2015): If you need to extend the PA-41, but do not yet know whether you will owe tax, you are safer to paper file a REV-276 PA Request for Extension (required when tax is due with the return). The PA REV-276 will be of record with the PA Department and does not need to be attached to the e-filed PA-41. If it turns out that you don’t owe tax, no harm done in filing a REV-276 rather than relying on a federal 7004 (the PA procedure for no-tax returns).

22) 1040, Schedule E, Line 19, Other Expenses: returns with a value in this field were being rejected. The software has been modified to include the description as well as the amount for this line. Also, the description was expanded to three slots to match Columns A, B, and C.

23) 1116: Several returns were rejected even though the amount on Form 1116 matched the amount on the 1041, Schedule G, Line 2a. We have been able to get these returns accepted, and are working to track down the pattern that was leading to rejections.

24) PA Schedule G-L (Credit for Taxes Paid to Other States): The state name must be entered; otherwise, the return will be rejected.

25) K-1s: You must enter an SSN or EIN for each beneficiary. We have added a new dropdown menu (on the “Foreign Address” screen, green button on the right of Edit Beneficiaries). There, you can choose “Appld For” or “ForeignUS” as an alternative to an SSN or EIN. Your return will now be accepted.

26) PA-41: Suffix. The only permitted values are JR, SR, I, II…X. The software now strips out any trailing periods and forces the value to upper case. Any suffix values such as “Esq.”, etc., will still cause the return to reject.

27) PTIN vs. PIN: Several users have entered the PTIN number into the PIN field in the General Information screen. If the PIN field is left empty (which you should normally do), then we use the rightmost five characters of the PTIN as the PIN.

28) Minimizing 6-in-1. A number of customers are not aware that you can get back to your desktop (or to other open programs) without quitting 6-in-1:

(a) Windows-D (takes you to your desktop)

(b) Right-click on the empty part of the tray at the bottom, then choose “Show Desktop”

(c) Alt-Tab (once): will switch back to the last program that was viewed

(d) Alt (keep it down), then press Tab (one keystroke at a time). This will display your programs as icons in the middle of your screen. Once you’ve reach the icon that you want, then release the Alt key.

29) Grantor Advice Letter (1041, Worksheets, Grantor Advice Letter): You will need to enter the grantor name/address information into the separate fields now provided in the lower right panel

30) The IRS 1041 schema included a data element entitled “No Future Filing Required”. We added a field for this in 6-in-1. It turns out that this field serves no real purpose other than specifying a “Final Return”. Therefore, we have reverted to using our existing “Final Return” field to populate the “No Future Filing Required” element. The checkbox for “No Future Filing Required” that appeared in the upper right of the screen (to the right of the right panel) has been removed.

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