mslatinlady:
Actually it's not all that complicated. When a company wants to be certified to e-file customer's taxes they apply to the IRS for authorization to be a certified submission service. The IRS gives them the criteria, format and transmission parameters, for every form, they are to use when doing a test submission. After they submit a test return they are evaluated by the IRS for the accuracy of their submission for all the forms they have submitted. The IRS certifies them for specific forms. That is why some e-file companies only are certified to e-file simple returns. They have to be certified for "each" IRS form. This usually is done multiple times to ensure they have the parameters and process down to guarantee repeatable accurate submissions for processing.
As for the IRS 'pulling' the e-files from Turbotax, that is inaccurate. Turbotax transmits the tax filings to an IRS 'holding' data base (Pending) with a DCN tracking number. The IRS has to pull the filing from the submission holding data base into their system for processing. Then the filing is either Accepted or Rejected, based on the IRS criteria. This is also where some returns are rejected because the previous year's AGI does not match the IRS data base AGI.
The IRS does not return a rejected filing, it deletes it and returns a rejection code with the DCN (tracking number) for the submission. If Accepted it is then moved to the submission bucket in the IRS system for processing. I believe Turbotax does have an issue with the timely reporting of the IRS return statuses, or it could be the timeliness of the IRS providing status to Turbotax. All of the state submissions are processed the same way. Some states are not set up for accepting all returns via e-file and they still have to be mailed in. And a few states were very slow to develop the processing code to deal with all the changes that were made as a result of all the 'free' money in the last tax year and how the IRS is handling this income.
For security reasons Turbotax has no visibility on the status of an Accepted return, because it is inside the IRS 'firewalled' secured system. Only the owner of the return has access through their secured access to the IRS system.
I think this is a pretty accurate break down of the e-filing processing logic, Does this help?
