IRS INTRODUCES E-FILE FOR CORPORATIONS & EXEMPT ORGS


J

John H. Fisher

IR-2004-43, March 30, 2004

IRS INTRODUCES E-FILE FOR CORPORATIONS, EXEMPT ORGANIZATIONS

WASHINGTON - For the first time, corporations and tax-exempt
organizations have the option of filing their annual income
tax and information returns electronically, the Internal
Revenue Service announced today.

Corporations and tax-exempt entities can now significantly
reduce the time it takes to file their Forms 1120 and 990
simply by filing them electronically. The new electronic
filing system was developed and delivered through the IRS
Business Systems Modernization program and began accepting
returns last month.

The new system provides corporations and tax-exempt
organizations the option to transmit tax return data using a
secure Internet connection in place of a modem. Taxpayers
and tax professionals can prepare the returns using
IRS-approved software developed by one of several software
companies. The returns are then transmitted to IRS through a
secure Internet site accessible only to registered users.

"We have worked closely with tax professionals to build a
new approach based on industry needs. The successful launch
of this modernized e-file process means charitable
organizations and most corporations can stop filing massive
paper returns," Commissioner Mark W. Everson said.

The improved process offers additional advantages:

- Tax professionals can attach documents to returns in
Portable Document Format (PDF).
- Error messages are quickly delivered and easier to
understand.
- Returns are processed upon receipt and an IRS return
message lets tax professionals know the return has been
filed.

In 2003, corporations filed more than 5.7 million corporate
income tax returns (Form 1120) and tax-exempt organizations
filed 506,000 annual information returns (the Form 990
series) last year, plus 395,000 automatic extension forms.

This is the first release of the new electronic filing
system. The project's goal is to replace outdated,
proprietary IRS technology with an industry standard process
that uses Extensible Markup Language or XML. This is the
first XML-based system IRS has used to receive tax returns
over the Internet.

On Feb. 23, IRS began accepting 59 forms for electronic
filing of corporate returns 1120 and 1120S and exempt
organization returns 990, 990EZ, 1120POL and the extension
Form 8868, to request an automatic extension of time to
file. More than 95 percent of corporations are able to file
electronically now and all corporations will be able to when
another 43 forms and schedules are released later in 2004.
More than two-thirds of exempt organizations can file
electronically now, and an additional 244,000 will be able
to file other types of returns later in 2004 and 2005.

In future releases, the new system will make it possible to
file federal and multiple-state returns in a single
electronic transmission. The IRS is working closely with
several states on this future option.

Only electronic return originators have access to the new
electronic filing system. Tax professionals can become
electronic return originators by using a new, online
application process. Those who are already electronic return
originators can update their applications online to e-file
these new forms. Tax professionals wanting to know more
about the online application form and other e-services
should visit the e-services page on IRS.gov. The IRS Web
site also has more information about modernized e-file and
the software companies that support the new program.

Links on IRS.gov

- e-services, http://www.irs.gov/taxpros/article/0,,id=109646,00.html
- Modernized e-file for forms 1120/1120S,
http://www.irs.gov/efile/article/0,,id=103789,00.html
- Approved Software Providers for Corporate Returns, Forms 1120/1120S,
http://www.irs.gov/efile/lists/0,,id=119096,00.html
- Modernized e-file for Charities and Non-Profits,
http://www.irs.gov/efile/article/0,,id=108211,00.html
- Approved Software Providers for Forms 990/990EZ & 1120POL,
http://www.irs.gov/efile/lists/0,,id=119598,00.html

"Jack" - John H. Fisher - (e-mail address removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=:)
 
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