Academic journal article Journal of Accountancy

Electronic Tax Return Filing Jargon Checklist

Academic journal article Journal of Accountancy

Electronic Tax Return Filing Jargon Checklist

Article excerpt

"To make sure a RAL is done correctly, it's important the ERO provide the IRS with the correct DAN as well as the right RTN." As the Internal Revenue Service continues to pursue its goal of increasing the number of tax returns filed electronically, more and more jargon is entering the CPA's lexicon. To make it easier to understand an often bewildering "alphabet soup" of acronyms and abbreviations, here's a checklist of common electronic filing terms:

* ACK file--Acknowledgement file. The electronic acknowledgement sent by the IRS to the transmitter indicating the return has been received, accepted or rejected.

* DAN--Depositor account number. The number of a taxpayer's account to which the direct deposit of a tax refund should be sent.

* DDI or "flip" indicator--Direct deposit indicator. The indicator on the ACK file that shows whether the IRS will honor a taxpayer's request for a direct deposit of a tax refund. (A direct deposit is not honored--or flipped--when the IRS applies the refund to a taxpayer's outstanding tax liabilities, student loans, child support or payments to state and other federal agencies.)

* EFIN--Electronic filing identification number. The six-digit number the IRS assigns to each applicant in the electronic filing program.

* ERO--Electronic return originator. The firm, organization or individual who deals directly with the taxpayer; prepares a tax return or collects a prepared return to produce an electronic return; and obtains the taxpayer's signature on form 8453. …

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