What To Know About Modernized e-File
Modernized e-File (MeF) is an electronic system for filing tax returns with the Internal Revenue Service of the United States.
What is modernized e-File?
Modernized e-File was originally introduced in 2004, exclusively for corporate tax returns. Initially, there was only support for Form 1120 and related forms, but additional corporate tax forms were supported each year. Since its creation, MeF has safely and securely transmitted more than one billion tax returns, and more than 90 percent of all tax returns are filed electronically.
MeF is a web-based system that facilitates the electronic filing of corporate, individual, partnership, exempt organization, and excise tax returns through the Internet. MeF employs the widely established Extensible Markup Language (XML) standard. This is an industry-standard for identifying, storing, and transferring data, as opposed to the proprietary data transmission formats utilized by previous e-file systems.
What are the benefits of modernized e-File?
The IRS touts MeF as a significant innovation in how taxes are filed. They believe it has made the process tremendously more efficient. Some of the benefits they market are:
- New error code explanations specify the source of the error in the return and offer comprehensive information in the Acknowledgement File.
- Acknowledgments are returned in near real-time since transmissions are processed upon reception. No more waiting for system processing cycles that occur once or twice daily.
- You can e-file a balance due return with integrated payment options and request an electronic money withdrawal from your bank account simultaneously. Payments are subject to the restrictions imposed by the Federal Tax Deposit Regulations.
How can my firm use modernized e-File?
The IRS allows accounting firms to become certified e-filers through their website. They bill the partnership as one that saves firms money, increases their productivity, and builds their business while providing a service most taxpayers now expect.
To complete the application, you'll need to:
- supply identification information for your firm
- enter information about each Principal and Responsible Official in your organization
- Choose your e-file provider option. If you're a return preparer and want to e-file for clients, select Electronic Return Originator (ERO).
If the Principal or Responsible Official is certified or licensed, such as an attorney, CPA, or enrolled agent, they must enter their current professional status information. Everyone else must submit fingerprints to the IRS and be fingerprinted by a qualified expert; local police stations can provide this service.
How can Taxfyle help?
Your firm’s staff is busy. Why add to their work, especially during the busiest time of the year: tax season. With Taxfyle, you can put time back in your staff’s hands so they can continue doing what they do best, engaging with clients and growing your firm.
With our domestic outsourcing service, you can hand off the usual busy work that would create bottlenecks in your firm’s workflow to our team of qualified Tax Professionals across the United States. Signing up only takes a moment to augment your firm’s productivity and give you and your staff more room to breathe.