Electronic filing offers numerous benefits to the taxpayer and preparer. Some of these benefits include: the issuance of any refund is expedited; confirmation that the return was received and processed; potential for cost savings and increased revenue; and return data such as SSNs are validated at the front end. The IRS has stated that electronic filing continues to be the future of tax processing data delivery methods. With CCH Axcess Tax, you can participate in that future immediately.
This section provides information on the electronic filing process.
IRS Publication 1345, "Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns," should be thoroughly reviewed before any return is processed for electronic filing through CCH Axcess Tax.
Electronic Filing Procedural Steps Overview
Enter your Electronic Filing Identification Number (EFIN) and Vendor Control Number (VCN) through the Return Configuration Set in the Electronic Filing Options dialog.
Use the Electronic Filing worksheet in CCH Axcess Tax to designate a return for electronic filing and complete the return. Electronic filing may also be selected on a global basis by making an entry in the Electronic Filing Options dialog through the Return Configuration Set.
While in CCH Axcess Tax, calculate the return, then select Import/Export > EFS > Return to create the e-file return file. PDF attachments for the regular return will need to be reviewed prior to export and upload of the return. A fileable copy of Form 8879 or Form 8453 (if applicable) will also print upon export. Review the form for accuracy and completeness and secure all necessary signatures.
Authorize (release) the return(s) for transmission to the IRS, if you did not already do so on the upload process through CCH Axcess Tax,. Authorizing the release through Tax Preparation or through the Electronic Filing Status system will immediately send the return to CCH for transmission to the IRS.
The next day, check the status of the return in the Electronic Filing Status system. If the return has been accepted, mail Form 8453, if applicable, along with applicable required attachments to the IRS. If the return has been rejected, make the necessary corrections and reprocess the return.
Electronic Filing Procedural Steps
Review the following basic rules for submitting a return for electronic filing:
All the return information must be submitted electronically to be included for electronic filing. You cannot use the following forms or worksheets to include manual forms or schedules:
Depreciation and Depletion Options and Overrides worksheet, Depletion Overrides section.
Other Income worksheet, Form 1040 Income Adjustments section.
Other Adjustments worksheet, Form 1040 Adjustment Adjustments section.
Other Credits worksheet, Form 1040 Credit Adjustments section.
Other Taxes worksheet, Form 1040 Tax Adjustments section.
Payments worksheet, Other Payments section.
Do not attempt to electronically file amended returns. An Amended return must be filed on paper.
Once the IRS accepts your transmitted return, you cannot change or resubmit it electronically.
The worksheets you use to designate a return for electronic filing are:
Electronic Filing worksheet.
Specific electronic filing fields that are required appear on the following worksheets:
Wages, Salaries and Tips worksheet.
IRAs, Pensions and Annuities worksheet.
Other Income worksheet.
Entering Your EFIN / VCN
In the Return Configuration Set, click Configure Applications.
Highlight Tax Preparation and click Configure.
Select thereturn configuration set with the clients for whom you want to perform electronic filing and click OK.
Highlight Electronic Filing Options and click Setup. The Electronic Filing Options dialog displays. Enter your EFIN and VCN in the General tab.
Click OK when finished.
Designating a Return for Electronic Filing
When keying a return, you must indicate that you want the return designated for electronic filing. This can be done using one of the following methods:
Make any entry on Electronic Filing > General.
Make an entry on the Electronic Filing worksheet.
To globally select all returns for electronic filing, select the Electronic Filing Options section in the Configure/Tax Preparation dialog in the Return Configuration Set and mark the Electronically File Return in each applicable tab.
Once you key a return and calculate it, the return is run through diagnostics to determine its eligibility for electronic filing. This process is explained below.
Calculating and Creating an IRS File
Once you designate a return for electronic filing and complete data entry on the return, complete the following steps to create the IRS file.
In Tax Preparation, select Calc to calculate the return.
Examine the diagnostics to ensure that the return qualifies for electronic filing. If the return does not qualify, check the diagnostics to determine the reason(s) for disqualification (see the Electronic Filing Diagnostic Report section for details). If the return qualifies for electronic filing after completing the calculation, create the IRS file and print the fileable copy of Form 8879 in the next step.
After the Calc completes successfully, select File > Export > Electronic Filing > Return for the return. An IRS-formatted file is created and a fileable Form 8879, IRS e-file Signature Authorization, prints. After exporting, the Upload Returns dialog displays. You will then have the option to Upload and hold the return or Upload and release to taxing authority.
If the return is recalculated, the "This is Not a Fileable Copy" message appears on Form 8879 until you create the electronic return file again.
Electronic Filing Diagnostic Report
You can display or print a diagnostic report detailing why the return was disqualified.
To view or print the diagnostic report:
In Tax Preparation, select File > Print > Preparer Reports.
Choose Diagnostics.
If you want to view the report, click the View Report button and click OK. Otherwise, just click OK. If the return did not qualify, the reason is included in the level 5 diagnostics for extensions and level 4 diagnostics for regular returns. The disqualified diagnostics print or display at the top of the diagnostic report. You can reprocess the return with the appropriate corrections, or if necessary, file a paper return.
Click Close to close the Diagnostics dialog.
Select File > Exit to exit Tax Preparation. Answer Yes to the prompt to save your changes. Use the Electronic Filing Status system to select the returns you wish to send to the CCH service center for transmittal to the IRS.
Authorizing (Release) Returns to CCH
Once you determine the return is ready to send to the IRS, you can either release the return(s) through Tax Preparation using the upload and release to taxing authority feature or release the return(s) through the Electronic Filing Status system. You select the return(s) you want released and they will automatically be transmitted to CCH to be released to the taxing authority.
Transmitting Returns to CCH and the Taxing Authorities
The return must first be uploaded to the Electronic Filing Status system.
Log in to the Electronic Filing Status system.
Click the Release Returns tab. Only returns with a current status of "Ready to Transmit" will be listed on the tab.
Search for returns to release using one of the following methods:
To search for multiple clients, select the filtering options from the drop-down lists and click Go.
To search for a single client, use the Specific Client by section and select an option to search by. Example options are Return ID, Name (Last, First), or SSN. Enter the search term in the text box and click Search. The results of your search will display in the bottom section of the screen.
Select returns to release using one of the following methods:
Select the check box next to return.
Click Select All Displayed to choose all of the returns displayed on the page.
Click De-Select All Displayed to de-select all of the returns displayed on the page.
Click Release to Taxing Authorities to immediately send the returns to CCH for transmission to the IRS.
Click OK on the confirmation dialog. The selected returns will be released to the taxing authorities.
Select the e-filing status tab to view the status of your e-filed returns.
CCH Axcess Tax transmissions to the IRS is in near real-time and acknowledgements should be posted from 24 hours to 48 hours. Returns filed through Modernized e-File (MeF) can be submitted year round.
Returns Accepted for Electronic Filing
IRS acceptance of the electronic return indicates that the electronic filing process was successful and the return, in all probability, will be processed as expected. An IRS acceptance acknowledgment will usually be issued from 24 to 48 hours after sending the return.
For all returns accepted by the IRS, CCH Axcess Tax will either send an acceptance e-mail or mail an acceptance postcard to the taxpayer or preparer. The postcard will contain the ERO's address as the return address. Both are simply a summary of IRS Form 9325 and will inform the taxpayer of the following:
The date their return was accepted by the IRS.
The IRS processing center the return was transmitted to.
The general time frame in which they can expect to receive their refund (usually three to four weeks, according to the IRS). If direct deposit has been selected, the refund could be received in as little as 10 days.
Mailing Form(s) 8453 to the IRS (If applicable)
The next business day after a return is accepted by the IRS, you must batch Form(s) 8453, if applicable, and attachments and submit them to the appropriate electronic filing IRS processing center. The IRS requires that you do the following to avoid facing penalties and/or suspension from the electronic filing program:
Maintain copies of all Forms 8453 you submit. The IRS suggests, though it is not required, that you also keep copies of all attachments, such as W-2 forms.
Ensure all Forms 8453 are fully and correctly completed.
Ensure all appropriate attachments are included.
Make sure the forms are shipped in a timely manner to the appropriate IRS service center.
Receiving Refund(s)
Certain liability conditions may cause a refund to be offset after the return has been accepted. As part of the acknowledgment file received from the IRS an indicator that a debt exists will be made. The IRS will also contact the taxpayer in writing concerning the type of debt. The following are the types of debts that may cause the IRS to offset(reduce) the refund:
Delinquent federal tax.
Delinquent state tax.
Delinquent student loan.
Delinquent child support.
Back payments owed to other states and/or federal agencies.
If the taxpayer does not receive their refund within four weeks of the date of acceptance, they should call their local IRS district office for assistance.
A complete list of the IRS district electronic filing contacts is provided in Publication 1345, as well as on the IRS website.
Because of disclosure laws, the IRS cannot provide information through CCH Axcess Tax regarding refund delays or reasons the refund may not be honored as a direct deposit. Likewise, the IRS cannot provide this information to the practitioner unless a current power of attorney is on file at the IRS.
Balance Due Returns
For balance due returns filed electronically, unless direct debit is used, Form 1040-V, Payment Voucher must accompany the payment. The mailing address for electronically filed returns is, in most cases, different than paper filed returns. Refer to the instructions for Form 1040-V, or the transmittal letter and filing instructions prepared by CCH Axcess Tax, which references the correct mailing address.
Electronic Funds Withdrawal is available to pay a balance due for electronically filed returns. The following worksheets and form are used to make the necessary entries to use direct debit:
Direct Deposit/Electronic Funds Withdrawal and Form 8888.
The Electronic Filing Status system maintains a record of all your electronic returns. If the IRS has rejected a return, you must determine the reason, then resubmit the return or file a paper return.
To check the status of your returns:
Log in to the Electronic Filing Status system.
Search for returns by using the Filter or Search option.
Review the e-filing status in the ELF Return Status Information section.
Federal Status and State Status conditions can be:
Ready to Release. The return is ready to be released for transmission to the IRS.
Released for Transmission. The return has been released by the tax preparer and is ready to be transmitted to the IRS but has not yet been transmitted.
Transmitted. The return has been transmitted but no acknowledgment has been received from the IRS.
Accepted. The IRS has accepted the return for processing.
Conditional Acceptance. The state has conditionally accepted the return for processing. The state will send an acceptance acknowledgment at a later date. The preparer should not retransmit the return.
Rejected. The return has been rejected for processing by the IRS. You should check to determine the reason for the rejection and resubmit the return electronically or file by paper.
Stop. If you have stopped transmission of this return on the Change Status tab, this status will display.
Paper Filed. If a return was rejected and is now going to be paper filed, the status can be changed to Paper Filed from within the Rejection Report.
Imperfect Return. The return was indicated by the preparer through Tax Preparation to be an imperfect return. This filing is used when the return has already been rejected for Business Rule SEIC-F1040-501-02 and/or R0000-504-02, but the taxpayer and preparer have chosen to file the return electronically again. The IRS considers this an accepted return, but the return will go through further processing and the credit associated with the dependent's Social Security Number (SSN) may be denied.
Inactive ITIN. The return was indicated by the preparer through Tax Preparation to be an inactive ITIN. This filing is used when the return has already been rejected for Business Rule IND-185, IND-186, IND-187, IND-188 and/or F2441.005, but the taxpayer and preparer have chosen to file the return electronically again. The IRS considers this an accepted return, but the return will go through further processing and the credit associated with the ITIN may be denied.
Return History/Batch Print. This can be used to display the Return History for a single client or for multiple clients. The Return History displays a complete report of the actions taken on a client return. When the Return History option is selected, the screen displays:
A detailed report for all activity done on the client's return.
The date on which each action took place.
An option to print the history report for that client's return.
State acknowledgment information.
The amount of the refund or balance due.
The indicator of whether the taxpayer or spouse's date of birth is correct.
The debt indicator, if applicable.
The electronic postmark received from the IRS.
The direct debit acceptance indicator.
The method of acceptance notification.
Viewing the Rejected Returns Report
Rejected returns are returns rejected for processing by the IRS. A rejected return ordinarily indicates a problem in the content of the return. CCH Axcess Tax users are responsible for tracking and resolving problems, and resubmitting the return electronically or by paper.
If a rejection is related to a transmission problem, CCH Axcess Tax will retransmit the data until a successful transmission is achieved.
To view the Rejection Report for a return, do the following:
Log in to the Electronic Filing Status system.
Search for returns using the Filter or Search option.
Click the Rejected link in the row of the return, or if there are multiple states, hover over the Multi link and click the Rejected link in the pop-up window. The Rejection Report dialog will display.
Do one of the following:
Click Print to print the Rejection Report.
Click Export to export the Rejection Report to a .CSV file.
Click Change status to paper filed to mail the return instead of filing electronically.
Click the X in the upper right corner of the dialog to return to the Electronic Filing Status system.
Other Electronic Filing Information
State Electronic Filing
The state return can be transmitted to the IRS subsequent and separate to transmitting the federal return. In order to notify CCH Axcess to send a state subsequent or separate to the federal return, an entry needs to be made on the Electronic Filing worksheet > General section > Do Not Transmit Federal Return / Extension at This Time field or deselect the federal unit on the Electronic Export dialog box. When this field is marked, the federal unit is deselected, and CCH Axcess will not transmit the federal return to the IRS.
Re-transmissions
To retransmit electronic returns, simply repeat the electronic filing procedural steps.
The electronic file for all states is created (through the Export function) simultaneously with the federal. As a result, the federal Form 8453 or Form 8879, IRS e-file Signature Authorization, will print anytime an electronic file is created.
Third Party Processing Option
This option is available to allow electronic returns created within CCH Axcess Tax to be transmitted through a third party other than CCH Axcess Tax. The entry for this option can be found in the Return Configuration Set, or the Electronic Filing worksheet > General section. When this option is selected, the IRS file is created with an extension of "IRS" and will reside in a subdirectory/folder called "IRS" within the WFX32\CLIENT\20I\ directory/folder. The IRS file can then be processed through the third party software.
Ineligible Return Conditions
Amended or corrected returns are not eligible.
Returns with a power of attorney currently in effect for the refund to be sent to a third party are not eligible.
Returns with a taxpayer/spouse Social Security Number that is not within the ranges of:
001-01-0001 - 665-99-9999
667-01-0001 - 899-99-9999
Valid ITIN / ATIN
Returns which require special consideration or procedures for completion, such as returns for taxpayers who have received waivers from the IRS, are not eligible.
In addition to the IRS return eligibility limitations, CCH Axcess Tax has the following additional limitations for electronically filed returns:
Manually-calculated forms and schedules will disqualify a return. All of the information in the return must be generated through the CCH Axcess Tax program in order to file a correct return with the IRS.
Form 8453 Mailing Addresses
If Form 8453 is needed to send any required paper forms or supporting documentation to the IRS, mail to the address indicated within the transmittal letters within 3 business days after the return has been accepted. Please note that documents may instead be attached as PDFs and transmitted with the electronic file.
Common Questions Asked by Electronic Filing Participants
Acknowledgment Questions
Q. I released a return for transmission to the IRS yesterday and I have not received my acknowledgment back. When can I expect to receive it?
A. The IRS advises that acknowledgments should be received within 24 to 48 hours. Normally they are back within 24 hours, but we do need to allow them up to 48 hours before contacting them. If you have not received the acknowledgment within 48 hours and your Electronic Filing Status system is showing Transmitted, please call the Electronic Filing staff toll-free at 1-800-739-9998.
Form 8453 Questions
Q. I have reprocessed a rejected return and received a new Form 8453, but I already submitted the original Form 8453 to the IRS. What do I do now?
A. Do not mail Form 8453 to the IRS unless you know the return has been accepted for processing by the IRS. If you have already mailed the Form 8453 and have a rejected return, you will have to contact the IRS. In most cases you can write a letter explaining that you inadvertently sent the wrong Form 8453 to the IRS.
If you continue to submit Forms 8453 on rejected returns, the IRS will probably contact you.
Q. I mailed my Forms 8453 to the wrong IRS processing center. What do I do now?
A. Contact the proper IRS processing center and explain what happened. They will probably contact the IRS center where you sent Form 8453.
General Questions
Q. Who is the Electronic Return Originator (ERO)?
A. The person or firm who collects the actual return from the taxpayer for the purpose of electronically filing it with the IRS is considered to be the ERO. If you are preparing the return and submitting it for electronic filing, then you are the ERO.
Q. I have received the acknowledgment indicating that my return has been accepted, but I have a correction to make to the return. Can I call the change to the IRS?
A. No. Once the return has been accepted by the IRS for processing you cannot change the electronic return. You must file an amended return. The amended return cannot be sent electronically.
Q. I printed the paper copy of my return and Form 8453/8879 was included, but why does it have "This is not a Fileable Copy" across the form?
A. The Form 8453/8879 that prints with the message "This is not a Fileable Copy" is for your review only. When the File/Export/Electronic Filing/Return step is executed to create the electronic return and print the fileable Form 8453/8879, this message is removed. This is the form you will be filing with the IRS.
After creating the electronic version of the return, a fileable 8453/8879 can also be printed through File/Print/Selective Pages and selecting Form 8453/8879. If the return is recalculated, the "Not a Fileable Copy" message reappears on Form 8453/8879 until the electronic return is once again created. This message can also turn off on Interview Form EF-1, Box 41 (Electronic Filing worksheet, General section, Do not print nonfileable message on signature forms field).
Q. I have processed a return and it is ready to file, except I did not select electronic filing. How do I add electronic filing to a return that has already been processed?
A. The only way to add electronic filing to a return already processed is to reprocess it with the Electronic Filing worksheet information included.
Q. I unintentionally released a return for transmission to the taxing authorities. Now what do I do?
A. If you unintentionally released a return for transmission to the taxing authorities first go back into the Electronic Filing Status system. You can try to change the status of the return to Stop in the Change Status tab. The status of the return can only be changed if it is still showing in Released for Transmission status. If the return is showing in Transmitted status, it has already been sent to the IRS and you will have to wait to see if the IRS accepts it.
Q. A return that I sent for electronic filing has had the direct deposit not accepted (flipped). What causes this and how will it effect my client?
A. The local IRS district contact points should be contacted. The IRS has announced that all direct deposit requests will be honored.
Rejection Questions
Q. I have received my EFIN from the IRS and have verified that it is the correct EFIN, but my returns are rejecting because of an invalid EFIN. Why is this happening?
A. The IRS approval process is a two-step process. When the IRS receives your application to participate in electronic filing, they will send you a letter with your EFIN included. Then, at a later date, they will send you a second letter indicating whether or not you have been approved to participate in the electronic filing project.
If you have not received the second letter, then you have not been approved and cannot submit returns to the IRS until you are.
If you have received the second letter indicating you have been approved and your returns are still rejecting for an invalid EFIN, you should contact the IRS before authorizing any more returns for transmission.
Q. My return rejected on April 15. Is it considered a late-filed return now?
A. Returns transmitted and rejected on April 15 have until midnight on the fifth day after the 15th to be accepted. If the return has not been accepted by this time, you should file a paper return. With the paper return include an e-file return history and a note to the IRS explaining the return was filed by April 15, but rejected.
Electronic Filing of Form 4868 / Form 2350 Extensions
Introduction
Electronically filing extensions eliminates the need to mail in Form 4868 or Form 2350. If the tax return has a balance due, it can be paid either by credit card, by automatic funds withdrawal for which an electronic signature is required, or mailing a check.
Electronic Extension Procedural Steps Overview
Steps 1 and 2 are the same as for Form 1040.
3. Use the Electronic Filing worksheet, in conjunction with either the Return Options worksheet or the Extensions worksheet to select an extension for electronic filing.
4. While inCCH Axcess Tax, , calculate the return, then select File > Export > Electronic Filing > Extension to create the IRS file and print the Form 4868 and Form 2350 and transmittal letter. This will also upload the extension to the Electronic Filing Status system.
Steps 5 and 6 are the same as for Form 1040, see pg. 1.
Electronic Filing Procedural Steps
Filing Deadline:
The Form 4868 can be filed electronically no later than April 15, 2021 for taxpayers with a domestic address. For taxpayer with a foreign address, the filing deadline is June 15, 2021.
Configure Electronic Filing
Same as for Form 1040.
Entering Your EFIN
Same as for Form 1040.
Entering Your Sequence Number
Same as for Form 1040.
Designating Form 4868 for Electronic Filing
Enter code "Y" on the Electronic Filing worksheet > General section > File Extension Electronically field.
Designating Form 2350 for Electronic Filing
Enter code "Y" on the Electronic Filing worksheet > General section > File Extension Electronically field.
Calculating and Creating an IRS File
Once you designate a return for electronic filing and complete data entry on the return, complete the following steps to create the IRS file.
In CCH Axcess Tax, select Calc to calculate the return.
Examine the diagnostics to ensure that the return qualifies for electronic filing. If the return does not qualify, check the diagnostics to determine the reason(s) for disqualification (see the Electronic Filing Diagnostic Report section for details). If the return qualifies for electronic filing after completing the calculation, create the IRS file and print the copy of Form 4868 or Form 2350 in the next step.
After the Calc completes successfully, select Import/Export > EFS > Extension. An IRS-formatted file is created and a copy of Form 4868 or Form 2350 prints.
Electronic Filing Diagnostic Report
Same as for Form 1040.
The remaining steps are all the same as for Form 1040.