IRS e-file validation requirements
Understand the 2 types of IRS validations—business rule and schema—that e-filed tax returns must pass to avoid rejection.
The IRS requires e-file tax returns to follow a rigid structure to ensure IRS systems can receive and view them. The IRS rejects returns that don’t meet these requirements.
The IRS performs 2 levels of validation on all received returns: business rule validation and schema validation.
Business rule validation
The MeF system verifies return data against a series of business rules that test for missing information, mismatched information, or incorrect data.
For example:
- If Form 1120, line 8 contains a non-zero value, you must attach Schedule D (Form 1120).
- If Form 1120, Schedule L is present, Form 1120, Item D Total Assets must equal Form 1120, Schedule L, line 15d.
A failed business rule generates a rejection diagnostic and prevents the return from being e-filed.
Types of business rule diagnostics
Internal validation diagnostics
compare information within the return to business rules. Clear these diagnostics by correcting the tax return information and computing the return.BRMS diagnostics
are generated by the Business Rules Management System (BRMS), which compares the e-file XML file to business rules. Clear these diagnostics by correcting the tax return information and re-creating the e-file or re-generating the validation file. An asterisk (*) appears in front of BRMS diagnostics.Database validation checks
ensure information in the e-file matches information in IRS databases. For example, the IRS rejects returns if the taxpayer's EIN and Name Control (the 1st 4 characters of the taxpayer name) don’t match data in the IRS e-file database. You can't detect this type of violation until you submit the return to the IRS.Schema validation
XML has two parts: a
schema
and data
.The schema is created by whoever receives the data, like the IRS or a state agency. It sets the rules for each piece of information, including what's required, how long it can be, what type of data it is, and what values are allowed.
What actually gets submitted?
When you e-file, you're sending an XML file. This file holds all the data from the organizer and tax forms, with tags identifying what each piece of data means. For example, <Wages> represents wage income.
The MeF system checks every return against the schema to make sure the data is correct. If the data doesn't match the schema's format, the IRS rejects the return.
Schemas can also include conditional rules. For example: if <TotalIncome> is greater than 0, then <Wages> must also be greater than 0.
Example of a validation error
Say you enter Total Income directly on a tax form, but don't enter Wages. When you create the e-file, you'll get an error like this:
XML Validation error, <TotalIncome> unexpected
Below it, you'll get:
XML Tag expected, <Wages>
This happens because the schema requires <Wages> whenever <TotalIncome> is present. The fix is to enter the missing Wages amount.
How the system flags errors
When you create an e-file, the system automatically checks the XML against IRS schemas. If it finds errors, the
Create E-file
screen shows how many there are. You can view the details under .You can't submit an e-file until all validation errors are resolved.
tip
Fix business validation errors first. Doing so often resolves related schema validation errors automatically.
