TN 9 (08-96)
RS 01804.051 Electronically Filed Tax Review
The Internal Revenue Service (IRS) presently offers three alternative methods for filing personal tax returns.
In addition to using the conventional tax returns (i.e., the Form 1040, Schedule SE, etc.), taxpayers can now file their tax returns electronically, via a 1040PC, or via tele file (filing of returns via telephone).
Since tele file is still in the pilot stages, the following instructions will address only tax returns which are filed electronically and via the 1040PC method of filing.
An electronically filed tax return is a Filing composite return consisting of electronically transmitted data and certain paper documents. The tax information is transmitted over telephone lines directly to an IRS computer where it is automatically checked for errors and missing information. The non-electronic part of the form consists of the Form 8453, U.S. Individual Tax Declaration for Electronic Filing, and other paper documents that cannot be transmitted electronically.
Electronic Return Originator is either an:
Electronic Return Preparer who prepares tax returns, including Form 8453, for taxpayers who intend to have their tax returns filed electronically or,
Electronic Return Collector who accepts completed tax returns, including Form 8453, from taxpayers who intend to have their tax returns electronically filed.
The 1040PC return format is a print option featured in commercially available tax preparation software. The 1040PC is a paper return that prints the entries made by the taxpayer, along with the line number reference for each entry.
It is mailed to IRS and processed by IRS in the same manner as a conventional tax return.
4. Form 8453
The Form 8453 is the electronic filing tax return for purposes of taxpayer verification and signature. A blank Form 8453 is the same as a blank tax return. Practitioners are prohibited from allowing taxpayers to sign a blank tax return.
The use and acceptance of an electronically filed tax return or 1040PC tax return does not alter SSA's policies with respect to the use and development of evidence needed to establish proof of SEI for lag and prelag years.
2. Form 8453
The Form 8453 must be completed and signed by all appropriate parties before the return is transmitted electronically. The form serves the following purposes:
Authenticates the electronic portion of the Form 1040, 1040A or 1040EZ;
Authorizes the electronic return originator to file the return on behalf of the taxpayer;
Serves as a transmittal for the associated non-electronic documents (paper documents) that will be stapled to the Form 8453;
Authorizes the electronic return originator to transmit the tax return electronically to the IRS via a third-party transmitter, if applicable;
Provides the taxpayer's written consent to have the refund directly deposited as designated in Part II of Form 8453 and;
Authorizes the IRS to inform the taxpayer's electronic return originator or transmitter whether the request for direct deposit will be honored, and discloses reasons for delaying processing of a return.
3. Electronically Filed Tax Return
An electronically filed tax return is not considered validly filed and accepted by IRS until a Form 8453, signed by the taxpayer, is received by the IRS.
Therefore, prior to transmitting the electronic portion of the tax return the ERO prepares, signs and has the taxpayer review and sign a Form 8453. If it is a joint return both signatures are required prior to the transmission of the tax return. The ERO also provides the taxpayer with all completed forms and schedules filed for the taxpayer. This documentation may be furnished on official IRS forms, or on facsimiles of official forms or on ERO designed forms that have data entries cross-referenced to the line numbers of the official forms. IRS Regulations require that this documentation must be provided at the time the taxpayer signs the Form 8453.
Once the electronically filed tax return is received and accepted by IRS and appropriate acknowledgement received by the ERO, the ERO must provide the taxpayer with a signed copy of the Form 8453. For Social Security coverage purposes, this form is sufficient proof that the tax return was properly filed and accepted by IRS. The Form 8453 is also the document used by IRS in court for legal purposes.
NOTE: The taxpayer's copy does not have to be signed by the taxpayer. However, it must be signed by the ERO and or paid preparer. This is because tax regulations require an original signature of a paid preparer on Form 8453, if the return was prepared by a paid preparer. If the taxpayer is unable to obtain the paid preparer's signature on Form 8453 (i.e., preparer is not an electronic filer), a copy of the appropriate page(s) of the paper tax return attached to the Form 8453, with the paid preparer's signature is acceptable. The attachment should be a copy of the Form 1040 or Form 1040A (pages 1&2 only), or Form 1040EZ. These forms should be annotated “COPY - DO NOT PROCESS”.
NOTE: If necessary, the taxpayer can request a copy of the actual tax return from IRS.
The 1040PC return is available to individual taxpayers and professional preparers nationwide. All that is needed to print a 1040PC return is a personal computer, a printer, plain white paper and IRS-accepted tax preparation software. This means that the software vendor has submitted the package developed to feature the 1040PC to the IRS for testing. Once the IRS deems the software to be acceptable, it assigns a software code to the vendor which is embedded into the software program before it is released for use. The software code (SC) prints in the “ADD INFO” (Additional Information) section of every 1040PC return generated from the package (See E01804.070, "ADD INFO" section of the 1040PC printout).
The tax information prints in a three column per page format. All of the taxpayer information is reported but none of the explanatory language or unused lines and columns from the conventional forms or schedules are printed. All supporting tax forms and schedules required for the tax return print in the 1040PC format as well. The only additional pages that may be physically submitted with the return are W-2's, W-2-G's and 1099R's and informational documents requiring a signature other than the taxpayer's, such as a doctor's certificate or Power of Attorney.
The 1040PC return contains the same penalties for perjury statement that is present on the conventional Form 1040 return. Additionally, there is a statement regarding direct deposit elections. Finally, there is a signature line for both the primary filer and spouse, and if applicable, the professional preparer. If the 1040PC is prepared by a paid professional, the preparer's information must print on the 1040PC return.
The 1040PC format cannot be used to report the following:
Non-resident alien, or dual-status alien returns;
Prior year or decedent returns;
Amended or corrected returns; or
Foreign address returns and returns with special considerations, like one with an IRS waiver.
Returns containing a Form 2555, Foreign Earned Income or a Form 3903F, Foreign Moving Expenses.