1040 - US ELF: Electronic funds withdrawal for balance due returns

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The IRS allows taxpayers to pay balances due on returns by authorizing the United States Treasury Department to directly debit the amount due from a specified bank account in a process referred to as electronic funds withdrawal (EFW). In order to ensure the EFW is successful, three key items must be entered within UltraTax CS:

For complete details about the required entries, see below.

Requested Payment Date

The requested payment date is entered in the Requested Payment Date field on Screen ELF, located under the Electronic Filing folder.

For returns filed BEFORE the April 15th deadline, the requested payment date can equal any date between the current date and April 15th. For any return filed AFTER the April 15th deadline (regardless of whether an extension was filed), the requested payment date MUST equal the current date (e.g. the date the electronic file is created and transmitted).

Note: The IRS normally performs electronic withdrawals in weekly cycles. The requested payment date guarantees that the debit will NOT occur prior to the date entered; however, it may occur up to a week or more after the requested date. The IRS has stated that it will honor all payment requests dated April 15th or earlier as timely, regardless of when the debit actually occurs.

Primary Bank Account Information

The taxpayer's primary bank account information is entered on Screen Bank, located under the General folder.

Unlike direct deposits, the IRS will only withdraw funds from a single bank account. When multiple accounts are entered on Screen Bank, note that only the primary account will be debited. UltraTax CS will perform an error check on the Routing Transit Number (RTN) entered for the primary bank account to ensure that it qualifies for electronic filing. It is recommended that you obtain this number from a paper check provided by the taxpayer, NOT a deposit slip. Deposit slips often use RTNs that are used solely for internal routing by the banking institution and are NOT valid for external debits and deposits.

Daytime Telephone Number

For all debit transactions, the Treasury Department requires a daytime telephone number at which the client can be reached. This is entered on Screen 1040, located under the General folder. The field for Daytime telephone/ext number is located below the Date of birth and Date of death fields; only the telephone number entered in the Taxpayer column is utilized for EFW purposes.

Frequently Asked Questions

Q. What payment amount is used for the electronic funds withdrawal?

A. By default, UltraTax CS uses the total balance due shown on Form 1040, Page 2 (including any penalties and/or interest calculated) for the EFW request. A different amount can be forced in the Amount of tax payment (Force) field on Screen ELF, immediately below the Requested payment date field. Note that the forced amount can be less than the total tax due, and the remaining balance can be remitted to the IRS by paper check. However, the forced amount cannot exceed the balance due shown on the return (including penalties and interest), or the debit request will be rendered invalid and will NOT be included in the electronic file.

Q. How do I know that the electronic funds withdrawal request is complete and will be included in the electronic file?

A. The IRS does NOT require the electronic funds withdrawal request information to be included on any government-submitted forms. However, there are several places within UltraTax CS to confirm the presence of an electronic funds withdrawal.

Q. The IRS has NOT withdrawn the funds from the clients bank account and they were set up for EFW. What do I do?

A. Follow these steps:

  1. Open the transmitted e-file via EFView and search for "PaymentAmount" by hitting CTRL+F to open a search box. If the "PaymentAmount" record is NOT included, then the IRS will NOT withdraw any funds from their account. Tell the user that at the time the e-file was created the EFW information was NOT included. Possible causes are incomplete data entry or diagnostics were present. Continue to Step 2 if the "PaymentAmount"record is present.
  2. Contact the Treasury Financial Agent, Customer Service at 1-888-353-4537 to inquire about payments but should wait at least 7 - 10 days after the e-file return is accepted before calling.

Q. What is used to determine which Filing Instructions to print, i.e. e-file or paper reference?

A. By default, UltraTax/1040 produces paper filing instructions when any diagnostics exist on the ELF Critical tab of the Federal Diagnostics dialog. Clearing ELF critical diagnostics allows the electronic file to pass error checking and produces electronic return filing instructions. However, in cases where the IRS announces a delay in processing returns containing forms impacted by late legislation, this option would allow delivery of the e-file filing instructions when the return is ready for delivery to the taxpayer. In cases where clients CANNOT e-file in the current year (for example, the IRS does not allow Forms 8839 or W7 to be electronically filed), the File this return electronically field on Screen ELF (Electronic Filing folder) remains available for proforma to the following year.

Note: The File this return electronically field proformas when the File the return electronically (Screen ELF) option is selected. To access the option, choose Setup > 1040 Individual, click the Federal tab, click the Other Return Options button, and click the Proforma tab.

Mark this checkbox to print electronic return filing instructions without a review of ELF critical diagnostics. Electronic filing instructions will be produced for all clients whose File this return electronically field on Screen ELF (Electronic Filing folder) is marked.

Note: When the Print e-file filing instructions even when e-file critical diagnostics exist option is on, the File this return electronically field on Screen ELF (Electronic Filing folder) must be removed for clients that cannot electronically file this tax year. (For example, the IRS does NOT allow Forms 8839 or W7 to be electronically filed.) The File this return electronically field will NOT be available for proforma to the following year for these clients.

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