When setting up as an Electronic Return Originator (ERO) in TaxWise, it’s crucial to follow the correct procedures to ensure your e-filing process runs smoothly and avoids errors. Here are some common mistakes to avoid when setting up the ERO in TaxWise:
1. Not Completing the IRS e-file Application
Mistake: Failing to complete or update your IRS e-file application for approval before attempting to file electronically.
Solution: Ensure that you have a valid, approved IRS e-file provider application and that your Electronic Filing Identification Number (EFIN) is active. This must be completed before using TaxWise for e-filing.
2. Incorrect or Missing EFIN
Mistake: Entering an incorrect or expired EFIN (Electronic Filing Identification Number) during setup.
Solution: Double-check that the EFIN you enter matches the one issued by the IRS and that it's active. TaxWise will require this number to process e-file submissions.
3. Failure to Assign ERO Role
Mistake: Not assigning the ERO role to the correct user within the software or failing to designate who will act as the ERO.
Solution: During setup, ensure that the individual responsible for submitting returns is assigned as the ERO in TaxWise. This individual will have the authority to electronically file returns on behalf of taxpayers.
4. Missing or Incorrect ERO Setup in TaxWise
Mistake: Skipping steps in the TaxWise setup process or improperly configuring your ERO details.
Solution: Carefully follow the TaxWise setup wizard and enter all required information about your ERO, such as:
ERO name
ERO address
ERO’s IRS e-file provider number (if applicable)
Contact details
5. Incorrect Bank Account Information
Mistake: Providing inaccurate or outdated bank account information for direct deposit or payment purposes.
Solution: Ensure that the bank account information entered in TaxWise is correct, especially if you’re requesting direct deposit of refunds or paying any tax due electronically.
6. Skipping Software Updates
Mistake: Not keeping TaxWise up to date with the latest updates and patches.
Solution: Regularly check for software updates to ensure you have the latest security patches and IRS filing requirements incorporated into your version of TaxWise.
7. Failure to Test E-filing Setup
Mistake: Not performing a test e-filing before submitting actual returns.
Solution: Run a test e-file through the software (as required by the IRS), which will help you identify issues with your ERO setup, software configuration, or EFIN before filing real returns.
8. Incorrect Taxpayer Information
Mistake: Entering inaccurate taxpayer information, such as names, Social Security Numbers (SSNs), or Employer Identification Numbers (EINs).
Solution: Double-check the accuracy of all taxpayer information before submitting the return. Even a small error can result in rejection or delays in processing the return.
9. Not Setting Up Security Protocols
Mistake: Failing to establish adequate security protocols for handling sensitive client data.
Solution: Set up and configure password protection, encryption, and other security measures within TaxWise to safeguard taxpayer information in compliance with IRS and privacy regulations.
10. Failure to Verify ERO and Taxpayer Signatures
Mistake: Not obtaining or properly verifying the signature authorization (Form 8879) from the taxpayer.
Solution: Ensure that Form 8879 is completed, signed, and stored for each tax return. This provides IRS authorization for you to e-file the return on behalf of the taxpayer.
11. Not Reviewing E-file Status or Rejections
Mistake: Failing to regularly check the status of e-file submissions or overlooking rejections from the IRS.
Solution: Always review the e-file status within TaxWise. If a return is rejected, promptly review the error codes and make necessary corrections.
12. Not Backup Data Regularly
Mistake: Not regularly backing up your TaxWise data.
Solution: Create frequent backups of your TaxWise data to prevent loss of tax return information and client data in case of software issues or system failures.