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CCH Axcess Tax

Federal Electronic Filing Information

Electronic Filing of 2016 Form 1120/1120S/1120F Returns

Introduction

Electronic filing offers numerous benefits to the taxpayer and preparer. Some of these benefits are: the issuance of any refund is expedited; confirmation that the return was received and processed is available; the potential for cost savings and increased revenue; and return data such as employment identification numbers are validated prior to the filing of a return. 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.

Electronic Filing Procedural Steps Overview

This section provides information on the electronic filing process.

1. Enter your Electronic Filing Identification Number (EFIN) in Electronic Filing Options in the Return Configuration Set.
2. Use the Electronic Filing worksheet in Tax is to designate a return for electronic filing. Electronic filing may also be selected on a global basis by making an entry in Electronic Filing Options in the Return Configuration Set.
3. Complete the return, calculate the return, then select Export > Return from the Review ribbon or EFS > Return from the Import/Export ribbon to create the electronic return file and print Form 8879-C/Form 8879-S, IRS e-file Signature Authorization. Review this form for accuracy and completeness and secure all necessary signatures.
4. Authorize (release) the return(s) for transmission to the IRS, if you did not already do so on the upload process through Tax. Authorizing the release through Tax or through the Electronic Filing Status System will immediately send the return to CCH for transmission to the IRS.
5. The next day, check the status of the return in the Electronic Filing Status system. If the return has been rejected, make necessary corrections and reprocess the return.

   Note: IRS Publication 1345, Handbook for Authorized IRS e-file Providers and Publication 4163, Modernized e-File Information for Authorized IRS e-file Providers of Forms 1120/1120S/1120F, should be thoroughly reviewed before processing any returns for electronic filing using CCH Axcess Tax.

Electronic Filing Procedural Steps

Review the following basic rules for submitting a return for electronic filing:

Electronic filing is available for Form 1120/1120S returns beginning January 2016.

Do not attempt to electronically file amended or prior-year returns. Amended returns must be filed on paper.

Once the IRS accepts an electronically filed return, it cannot be changed or retransmitted.

Use the Electronic Filing worksheet to designate a return for electronic filing.

The Form 8879-C/Form 8879-S/88790-I signature document (Practitioner PIN method) must be used for the purpose of signing the electronic return. The IRS will not accept paper Forms 8453-C/8453-S/8453-I. The taxpayer and ERO are required to sign the return with a personal identification number (PIN) which is entered on

the Electronic Filing worksheet.

Your EFIN on the IRS e-file Signature Authorization is also included in the electronic return as a way for the IRS to identify you, therefore, be certain of it's accuracy.

Applying for Your EFIN

Before electronic returns may be filed with the IRS, you must apply for acceptance into the IRS e-file Program. To begin the application process, complete IRS Form 8633, Application to Participate in the IRS e-file Program. You must indicate on Form 8633 that you intend to electronically file Form 1120/1120S returns. For more information regarding the federal application process, refer to IRS Publication 1345, Handbook for Authorized IRS e-file Providers.

As part of the application process, an EFIN will be assigned to those applicants accepted into the e-file Program. The EFIN issuance by the IRS is a two-step process. First a letter is sent stating the EFIN is assigned. At a later date a second letter is sent with notification of passing IRS suitability testing. At this time the IRS releases the assigned EFIN for live processing. Tax returns cannot be filed electronically until the final notification is received.

Entering Your EFIN

1. In the Return Configuration Set, select Electronic Filing Options.
2. Enter your EFIN in the ID number box. The option is also available to enter your EFIN on a return by return basis by making an entry on the Electronic Filing worksheet, Electronic Return Originator - Override section.
3. Click Save when finished.

Designating a Return for Electronic Filing

If you wish to file a return electronically, you must indicate that you want the return designated for electronic filing by making an entry on the Electronic Filing worksheet or selecting all returns for electronic filing on a global basis by making an entry in the Return Configuration Set.

To globally select all returns for electronic filing complete the following steps.

1. In the Return Configuration Set, expand Electronic Filing Options.
2. Select the product and check the Electronically file return box.

   Additional options are available on this screen to designate electronic filing for returns when the taxpayer has a balance due or to file all applicable state returns electronically. You can also select the type of paragraph to include using the Transmittal Letter/Filing Instructions paragraph drop-down list.

   Note: All of the above options can also be selected on a return by return basis in Tax on the Electronic Filing worksheet, General section.

3. Click Save when finished.

Calculating and Creating the Electronic Return File

Once you designate a return for electronic filing and finish data entry on the return, complete the following steps to create the electronic return file to send to CCH Axcess Tax for subsequent transmission to the IRS.

1. In Tax, select Calc > Return on the Home ribbon to calculate the return. During this step, the return is validated through diagnostics to determine its eligibility for electronic filing.
2. 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.
3. If the return qualifies for electronic filing after completing the calculation, create the electronic file and print the 8879-C/8879-S/8879-I, by selecting Export/Return from the Review ribbon or EFS/Return from the Import/Export ribbon. An IRS-formatted file is created and Form 8879-C/8879-S/8879-I 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.

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:

1. In Tax, Select the Home ribbon, select Print > Return Sections > Expand the Preparer Reports option.
2. Choose Diagnostics.
3. If you want to view the report, click the Preview button. Otherwise, just click Print. The diagnostics indicate whether or not the return qualifies for electronic filing. If the return does not qualify, the reason is included in the level 4 diagnostics. The level 4 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.
4. Click Cancel to close the Print Return Sections screen.
   

   Note: You can also either click on Review/Diagnostics to display the return diagnostics and select Print at the bottom to print diagnostics when they appear on your screen.

Authorizing (Release) Returns to Transmit

Once you determine the return is ready to send to the IRS, you can release the return(s) through CCH Axcess 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 release to the taxing authority.

Selecting Returns for Release to CCH Axcess Tax

1. The must first be uploaded to the Electronic Filing Status system.
2. Log in to the Electronic Filing Status system.
3. Click the Release Returns tab. Only returns with a current status of "Ready to Transmit" will be listed on the tab.

   Note: If a return does not appear in the list, either it was not successfully exported for electronic filing, it has been deleted, has a status other then "Ready to Transmit", or was selected to be transmitted a third party other than CCH.

4. 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 Filter.
   • To search for a single client, use the Specific Client by section and select and option to search by. Example options are Return ID, Name (Last, First), or EIN. 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.
5. 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.
6. Click Release to Taxing Authorities to immediately send to returns to CCH for transmission to the IRS.
7. Click OK on the confirmation dialog. The selected returns will be released to the taxing authorities.
8. Select the e-filing status tab to view the status of your e-filed returns.

Returns Accepted for Electronic Filing

IRS acceptance of an 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 transmitting the return.

Form 8879-C/Form 8879-S/8879-I Signature Document

The IRS requires that you do the following to avoid facing penalties and/or suspension from the e-file Program:

• Maintain copies of Forms 8879-C/Form 8879-S/8879-I for all returns you submit.
• Ensure all Forms 8879-C/Form 8879-S/8879-I are fully and accurately completed.
• Ensure all appropriate attachments are included with the form.
• Store the documents in an easily accessible manner in the event the IRS requests them.

Receiving Refunds

Certain liability conditions may cause a refund to be offset after the return has been accepted. An indicator that a debt exists may be included as part of the acknowledgment file received from the IRS. The IRS will also contact the taxpayer in writing concerning the type of debt.

Because of disclosure laws, the IRS cannot provide specific information to CCH Axcess Tax regarding refund delays or reasons a refund might 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, the payment mailing address is, in most cases, different than the address for paper filed returns. Refer to the transmittal letter and filing instructions prepared by CCH Axcess Tax, for the correct mailing address.

Electronic Filing Status System

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:

1. Log in to the Electronic Filing Status system.
2. Search for returns by using the Filter or Search options.
3. 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 acknowledgement 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 State 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.

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 debt indicator, if applicable.
• The electronic postmark received from the IRS.
• The direct debit acceptance indicator.
• The method of acceptance notification.

Viewing Rejected Returns

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 on 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:

1. Log in to the Electronic Filing Status system.
2. Search for returns using the Filter or Search option.
3. 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.
4. Do one of the following:
   1. Click Print to print the Rejection Report.
   2. Click Export to export the Rejection Report to a .CSV file.
   3. Click Change status to paper filed to mail the return instead of filing electronically.
   4. Click the X in the upper right corner of the dialog to return to the Electronic Filing Status system.

Other Electronic Filing Information

Retransmissions

To retransmit electronic returns, simply repeat the electronic filing procedural steps. Note that Form 8879-C/Form 8879-S/8879-I will print anytime an electronic file is created by selecting File/Export from the menu.

Return Eligibility

Electronically filed returns are limited to certain IRS forms and schedules. Returns that require any form or schedule other than those included in the following list cannot be electronically filed. CCH Axcess Tax will pre-screen returns to ensure eligibility. The forms and schedules allowed by the IRS and available through CCH Axcess Tax for electronic filing are:

1120/1120S/1120-F Forms and Schedules Available for 2016 returns

Exclusions to Electronic Filing

Per the IRS, Form 1120/1120S/1120-F returns meeting the conditions below cannot currently be filed electronically.

• Returns with tax period ending dates prior to December 2011
• Returns covering multiple tax periods
• Amended returns
• Bankruptcy returns
• Returns with precomputed penalty and interest
• Prompt assessment
• Reasonable cause for failing to pay timely
• Reasonable cause for failing to file return timely
• Requests for overpayments to be applied to another account
• Election to make installment payments for a portion of the total tax attributable to the Bank Holding Company Tax Act
• Name change returns

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 you Electronic Filing Status system is showing Transmitted, please call the Electronic Filing staff toll-free at 1-877-977-9739.

General Questions

Q. Who is the Electronic Return Originator (ERO)?

A. The person or firm who collects the actual return from the taxpayer or preparer for the purpose of electronically filing it with the IRS is considered to be the ERO. Officially, the ERO is the person who's name appears on Form 8633 as a person authorized to sign for your firm.

Q. Do I have to submit a new Form 8633, Application to Participate in the IRS e-file Program, every year?

A.No. You do not have to submit a new Form 8633 if you filed a Form 8633 to participate in the 1120/1120S/1120-F e-file program last year. You are required to submit a revised Form 8633 if your application information has changed.

Changes that require a revision to your Form 8633 include a change in the contact person or telephone number on the application, a change in the company's structure, change of address, officers, etc. Other information on the application may be updated over the phone by contacting the IRS Andover Submission Processing Center at 1-800-691-1894. The IRS may periodically require a new Form 8633 even if you have no changes to your old application. In this case, they will contact you when a new application is necessary.

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 IRS to make the change?

A. No. Once the return has been accepted by the IRS for electronic processing, you cannot change the 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 8879-C/Form 8879-S was included, but why does it have "This is not a Fileable Copy" printed on the form?

A. The Form 8879-C/Form 8879-S/Form 8879-I that prints with this message is for your review only. When Export/Return from the Review ribbon or EFS/Return from the Import/Export ribbon is selected from the menu to successfully create the electronic return file and print Form 8879-C/Form 8879-S/Form 8879-I, this message is removed.

After creating the electronic version of the return, Form 8879-C/Form 8879-S/Form 8879-I can also be printed by selecting Print/Print Selective Pages from the Home ribbonfrom the menu and selecting Form 8879-C/Form 8879-S/8879-I from the list of available forms. If the return is recalculated, the nonfileable message reappears on Form 8879-C/Form 8879-S/Form 8879-I until the electronic return is created again by selecting Export/Return from the Review ribbon or EFS/Return from the Import/Export ribbon from the menu.

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 or the Return Configuration Set information designating electronic filing for the return included.

Q. I unintentionally transmitted a return to CCH Axcess Tax. 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 a schedule will be posted in January on the support pages of the Electronic Filing Status system if you have any questions about the timing of transmissions.

Rejection Questions

Q. One of my returns rejected and I have to reprocess it for corrections. When I reprocess I will receive a new Form 8879-C/Form 8879-S/8879-I. Does the taxpayer have to sign the new Form 8879-C/Form 8879-S/8879-I?

A. Probably not. Most rejected returns can be corrected with a nonsubstantive change. Only if the change to the return was considered substantial, according to IRS rules, must the taxpayer sign a new Form 8879-C/Form 8879-S.

Q. I have received an EFIN from the IRS and have verified its accuracy, 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 e-file Program.

If you have not received the second letter, you have not been approved and cannot yet transmit returns to the IRS.

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.