IRS Warns More Info May Be Needed to E-File Business Returns

The IRS just issued IR 2017-123 that warns tax preparers that their tax providers may require additional information to e-file their business tax returns.  Due to phishing and other tax identity issues, the IRS continues to see more tax returns that are “fictitious”.

Therefore, to combat this, the IRS is asking tax software providers to require additional information to allow e-filing of business returns.  Some of the information that may be required include the following:

  • The name and Social Security number of the company individual authorized to sign the business return. Is the person signing the return authorized to do so?
  • Payment history – Were estimated tax payments made? If yes, when were they made, how were they made, and how much was paid?
  • Parent company information – Is there a parent company? If yes who?
  • Additional information based on deductions claimed.
  • Filing history – Has the business filed Form(s) 940, 941 or other business related tax forms?

As you can see, if you are a preparer of business income tax returns, you may have to get quite a bit of additional tax information from your clients that you normally would not obtain.  It is likely that each software provider will come up with their own procedures.

We had posted on this earlier this year and got quite a bit of feedback from our readers asking about this.  This ended up being something that our tax software provider had thought was required on 2016 tax returns, but it was not.  As you can see, it will now be required on 2017 tax returns.  It may be a good idea to inform your clients that additional information may be required to file their tax return.  The issue is that you may not know what is required until you actually try to e-file the return.

  • Principal
  • CliftonLarsonAllen
  • Yakima, Washington
  • 509-823-2920

Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a partner with CliftonLarsonAllen in Yakima, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. In fact, Paul drives combine each summer for his cousins and that is what he considers a vacation.

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Comments

Good to know. I will have to do this next time I e-file.

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