Electronic Options for Payroll Reporting John Myett National

Electronic Options for Payroll Reporting John Myett National Account Manager Shelley Dockstader Sr. Tax Analyst November 5, 2009 1

Why Should I e-file? Eliminates Paper Prevents Errors Provides Proof of Filing Allows Payment With Return Meets the Requirements of Revenue Procedure 2007 -38 2

Getting Started with e-file E-file Application Complete and submit online application http: //www. irs. gov/taxpros/providers/article/0, , id=97657, 00. html Apply for all of the e-file roles you will require Reporting Agent Transmitter? Software Developer? Pass a suitability check Receive e-file credentials Electronic Filer Identifier Number (EFIN) Personal Identification Number (PIN) Electronic Transmitter Identification Number (ETIN) 3

Build It or Buy It e-file Software Build your own – Specifications available in Pub. 3823 XML Schemas posted to IRS. gov Purchase Third Party Software – Approved software providers listed on IRS. gov Consider cost and user support 4

Testing Transmitters – All transmitters must complete e-file communications testing Demonstrate ability to transmit returns and retrieve acknowledgement files Software Developers – All software developers must complete software testing Approved software will receive a unique software ID 5

Electronic Submissions Reporting Agent – Sign all returns with single PIN Submit returns for processing (to transmitter) Retrieve acknowledgements Correct rejected returns and resubmit Transmitter – Batch returns for submission to IRS Receive transmission Acknowledgement Retrieve Acknowledgements Resubmit corrected rejects 6

Acknowledgements & Rejects Receive an Acceptance or Reject for Each Return Accepted Returns will be forwarded for posting to client account Rejected returns must be corrected and resubmitted Rejected Returns Error Codes provide feedback on what problems to correct Common error conditions – Name/EIN mismatch Schedule B out of balance 7

What About Making Deposits EFTPS is the Preferred Deposit Option More accurate than paper coupons Better and more automated documentation for use in issue resolution Clients can easily monitor their deposit activity by accessing eftps. gov 8

EFTPS Batch Provider – Free software available Allows up to 5, 000 deposits per transmission Preferred Option for most Reporting Agents Bulk Provider – Best option for very large providers No software provided Up to 100, 000 deposits per file Rev Proc 97 -33, General EFTPS guidelines Rev Proc 98 -32, Bulk and Batch Processor guidelines Pub. 4169, Tax Professionals Guide to EFTPS http: //www. irs. gov/pub/irs-pdf/p 4169. pdf 9

Information Reporting – W-2’s Working Electronically with the SSA Business Services Online (BSO) Register for a User ID File W-2’s Upload Wage File W-2 Online W-2 C Online Verify Employee Names and SSN’s for wage Reporting Purposes (Not Tax Preparation) More information at SSA. gov/BSO 10

Information Reporting – 1099, etc… Filing Information Returns Electronically (FIRE) Submit 1042 -S, 1098, 1099, 5498, 8027, or W-2 G electronically Need software to format data More information and specifications available in Publication 1220 Why Use FIRE – Paperless More Accurate Confirmed Filing Extended Due Date 11

In Summary Evaluate e-file Software Complete e-file Application Test Software and/or Communications File All Eligible Returns Electronically Use EFTPS for All Deposits Use Electronic Filing for W-2’s and Other Information Returns Become Compliant With Revenue Procedure 2007 -38 12

Questions? John Myett, John. Myett@irs. gov National Account Manger – Electronic Tax Administration Shelley Dockstader, Shelley. M. Dockstader@irs. gov Sr. Tax Analyst SBSE – CLD Payroll & Practitioner Stakeholder Liaison 13