NACTP Filing Season Recap Areas of Interest to Industry and States

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1 NACTP Filing Season Recap Areas of Interest to Industry and States FTA e File Symposium Thursday May 22, 2014 Norfolk, VA Panel Sanford Schmidt Intuit Contact: Sanford_Schmidt@intuit.com Johnetta Baugham Liberty Tax Contact: johnetta.baugham@libtax.com Annette Null H&R Block Contact: ANull@hrblock.com Mark Castro Petz Enterprises Contact: mcastro@petzent.com 2 Topics Time Stamp for Receipt of Return/Payment Alerts PDF Requirement Low Use Forms/Schedules Schema Versioning/Releases E File Approval Process ATS Testing Interagency Consistency Business Rules 3 1

2 Time Stamp for Receipt of Return/Payment Goal All states use the same time stamp element to provide taxpayers, preparers and developers with confidence that the return and payment is considered timely filed when return is transmitted on the due date (April 15) NACTP preference Federal Electronic Postmark Date for both the return and payment for tax due on return Provides certainty, clarity and prevents confusion Other Available Time Stamps that are available: IRS Received Timestamp ACH Settlement Date 4 Alerts Create other ways of communicating with clients Need to tailor Alerts to ensure that alerts are used by taxpayer and preparers Need to be given at same time as acceptance of return Need to work with industry on expected communication with Taxpayer Industry Assure software is providing correct data format to the Agency Agency Provides additional information to taxpayers after their return has been Accepted Industry Gives information to Industry that the clients return is possibly still being processed even though it is acknowledged 5 PDF Requirement Should be used only when absolutely necessary Schema should be used for all forms, schedules and worksheets Should not be required for attaching forms from another state Requirements should only be for software created PDFs not for scanned docs Reduced special processing time for clients Agency Allow signature forms to be included with e Filed return Allow for other supporting documents to be included with e Filed return Industry Allow for support of forms that are not included in schema 6 2

3 Low Use/Forms Schedules NACTP believes that low use forms should be optional for software companies to support in their programs. Many companies programs are targeted to taxpayers who will rarely if ever use the low use forms Most software companies design their programs for easy to medium level returns This is especially true for programs for the self prep (online) market Low use forms are targeted to a small number of mainly business taxpayers which normally do not file a business income tax return It is acceptable for States to require software companies to support all of their commonly used forms and require that all forms they support be e filable An option to allow low use forms as a PDF attachment should be considered 7 Low Use Forms/Schedules Allow low use forms and schedules to be optionally supported Client base may never file certain forms/schedules Allow PDF attachment as an option for low use forms. State can set a threshold and if it is reached request that developer support for e file in the following year For States Providing schema for all forms provides taxpayers with ability to file all returns electronically For Developers that support low use forms Eliminates need to use PDFs for these forms or having to file them on paper 8 Schema Versioning/Releases Things to Know Provide sufficient release time to allow for development from release to industry to production, preferably 2 weeks Each schema release should update the version number Major releases require the new schema to be used; i.e. 3.0 to 4.0, and must be updated by vendor by date defined Minor releases do not require the new schema to be used; i.e. 3.0 to 3.1, and updated at the discretion of the vendor Identifies when updates to the schema is available Guarantees the latest version of the schema is being used in production 9 3

4 E File Approval Process Assign an assistor, like the IRS does. Affords one reviewer of the files Review file in its entirety Identify the errors with an explanation not saying an error. Keep e file and forms approval separate No full scope testing of products from the same tax engine Sooner approval for e file ensures transmitters can start transmitting at the onset of the filing season 10 ATS Testing Leverage same set of tests for 2D/Print testing & ATS testing. Utilize NACTP provided federal returns for state return generation. If they won t work why? NACTP would like to work with agencies to expand or enhance existing tests so they can be utilized by more agencies. Focus on quality versus quantity. By using the same tests for print & ATS, we can drive higher quality through identification of issues prior to production Also, utilizing the same tests reduces the workload needed to produce and process test submissions Leveraging NACTP tests will also help drive quality as vendors will start with the same federal returns. This enables easier identification of issues in state returns 11 Interagency Consistency Where not constrained by regulations, conform to filing requirements set forth by IRS For example, if a form is not required to be included with the federal return, do not require that it be attached to the state return If additional information is needed from reporting forms (1099s, W2s), request TIGERs and IRS add these requirements Reduced complexity in calculation/business rule implementation will help drive quality. Help lessen confusion by taxpayers who notice inconsistencies 12 4

5 Business Rules Schema validation should be used to validate format of data Ensure that business rule does not prevent legitimate returns from being filed Number should be adequate to accomplish the goal of accurate returns without being excessive Assists State in receiving more accurate return Assists taxpayer and preparers in resolving any issues that are identified Assists industry in creating a program that minimizes the number of returns that are rejected 13 Questions/Comments 14 Contacting NACTP Membership Where to send e mail to inform NACTP members when there are issues or questions: To reach all members: nactp_list@nactp.org Each committee also has a specific e mail address: For Income Tax Electronic Filing: nactp_efc@nactp.org For Income Tax Forms: nactp_glc@nactp.org For Sales & Use Tax: nactp_sut@nactp.org For Payroll & Information Reporting: nactp_pirc@nactp.org 15 5