The Modernized e-File (MeF) platform is a web-based system designed for electronic filing of various tax returns, including corporate, individual, partnership, exempt organization, and excise tax returns, via the internet. It enables tax return originators to submit both federal and state tax returns directly to the IRS in real time.
One of the key advantages of the MeF platform is its ability to provide fast acknowledgment and turnaround times for tax return submissions.
The Modernized e-File (MeF) platform was developed over three years, with input from a stakeholder group of tax professionals and software vendors who collaborated with the IRS throughout the design and development process. This partnership ensured the platform met the needs of the corporate tax filing community.
As a web-based system, MeF was built using XML (Extensible Markup Language), an industry-standard format for identifying, storing, and transmitting data. This approach replaced the proprietary data formats used by older e-file systems, making it more versatile and compatible with various platforms.
The MeF platform was enhanced progressively with additional features, and new forms were integrated into the system. Notable milestones include:
2007: Forms 1065 and 1065-B were added in January, followed by Form 2290 in August.
2008: Form 720, Form 990-N, and Form 1120-F were included in January, with Form 8849 added in May.
These additions made the MeF platform more comprehensive, accommodating a wider range of tax filing needs.
The Modernized e-File (MeF) platform uses XML (Extensible Markup Language) to structure electronic tax return data, following the IRS-defined format for electronic filing. Here’s how XML is utilized in the MeF system:
Tagging Data Elements: Every line item, data element, and instance in the tax return is assigned a specific XML name tag to organize the information.
Validation Rules: A set of validation rules is established to ensure that the XML file follows the required format. These XML schemas and Business Rules are provided to software vendors.
Software Development: Software vendors incorporate the XML schemas and Business Rules into their tax preparation software. Once developed, the software is tested and used to transmit tax return data in the specified XML format to the IRS.
Electronic Filing Process: Once the tax return is prepared, the return data is output into the XML format required for electronic filing.
Validation by IRS: The IRS validates the transmitted XML files against the defined XML schemas and Business Rules in the MeF production system.
Accepted Returns: Tax returns that pass validation are marked as "Accepted" and forwarded for further processing by IRS systems that handle paper returns.
Data Storage and Retrieval: All tax returns are stored in the IRS repository for future reference. These returns can be provided as XML stylesheets for easy viewing when needed.
This streamlined process ensures accurate and efficient electronic filing for both federal and state tax returns.
Detailed Error Feedback: The system provides new error code explanations that pinpoint the exact location of errors in the return. This detailed information is included in the Acknowledgement File, making it easier to identify and correct issues.
Real-Time Processing: Tax returns are processed as soon as they are received, and acknowledgements are returned in near real-time. This eliminates the need to wait for daily processing cycles, speeding up the filing process.
Convenient Payment Options: Taxpayers can e-file a balance due return and authorize an electronic funds withdrawal from their bank account simultaneously. However, payments must adhere to the Federal Tax Deposit rules.
These benefits make the MeF process faster, more efficient, and user-friendly, while offering better error resolution and payment flexibility.