2024 1040SCANverify Policy - 1041 Return

Contents:

1040SCANverify Policy for 1041 - Work Flow
1040SCANverify Policy - Tax Year 2024
Auto-verified pages
SurePrep Barcode
Document types
IRS Forms
Brokerage Statements
Grantor Letters with the same format
Processing Standards
Brokerage Statements
Schedule K-1
Schedule K-3
1099-MISC with 'SC Only' stamp
SurePrep Standards
Review of Work done by 1040SCANverify Process
Stamps
Additional Resources:

1040SCANverify Policy for 1041 - Work Flow

The post verification wizards start with Step 3 and ends with Step 7 as follows:
Step 3: Superseded Documents
Step 4: Child Form Association
Step 5: Duplicate Data
Step 6: New Form Review
Step 7: Tax Exempt Income
The '1040SCANverify' section provides two sub-options, SurePrep and In-house.
Selecting 'SurePrep' option will select all the wizards to be processed by SurePrep, except for the 'Tax Exempt Income' wizard.
Step 1: Pre-Verification
Step 2: Verification
Step 3: Superseded Documents
Step 4: Child Form Association
Step 5: Duplicate Data
Step 6: New Form Review

If the
Inhouse
option is selected, SurePrep will process the following wizards
Step 1: Pre-Verification
Step 2: Verification

1040SCANverify Policy - Tax Year 2024

SurePrep 'Include' barcode automation- The information from the page will be captured regardless of the standard policy (e.g. Incorrect SSN, Prior Tax Year, etc.)
If the "Bookmark Only" barcode is identified on a page, SurePrep's OCR will automatically skip the document from the (Step 2) Verification Wizard
Verifiers will not see the document appear during verification. Document(s) with the Bookmark Only barcode may appear in the next Review Wizard step, if applicable (e.g., Child Form Association, New Form Review, etc).

For certain multi-page documents (e.g., Consolidated Statements, Schedule K-1, etc.), you only need to place the barcode once on any one of the pages from the set.

Some Consolidated Statements may have more than one account number in a single consolidated statement. When placing a barcode, you will need to place a barcode for each different account number.

Exclude Cover Letter Pages: Certain multi-page documents include a cover letter with little to no information connecting it to the rest of the multi-page document set. We recommend excluding Cover Letter pages for Schedule K-1s and the consolidated statement intro pages.

IRS Forms
Brokerage Statements
Grantor Letters with the same format

Processing Standards

All standard box numbers on IRS Forms and brokerage statements are captured. If data on a source document matches the data already entered in the tax software, 1040SCANverify does not capture source document data again. However, if the data does not match, 1040SCANverify overrides the data on export in the tax software to match the data on the source document.
1040SCANverify addresses source documents of the tax year for which the return is submitted. E.g., source documents pertaining to year 2024 only are captured for a 2024 tax return.
If the source document type is any consolidated brokerage statement, grantor trust Letter or Schedule K-1 then relevant data will be captured only if EIN matches with Trust/Estates EIN else ‘Incorrect EIN’ is selected. The recipient last name will not be considered as parameter for 1041.
Note
: In addition, address fields are captured in Schedule K–1 (1041, 1065, and 1120S (Applicable to CCH Axcess Tax only)
Based on firm-level settings, only documents that appear under "In Verification" for review will be signed off.
The Sign-off Management at the firm-level helps customize sign-off rights for different levels. For more details refer the help article “Sign Off Management – SurePrep Help Center”
For certain forms, SurePrep will capture foreign (non-U.S.) countries as
Various /Other Countries
while selecting the country code in the Verification template (e.g., Form 1099-DIV - Box 8 Countries).
1040SCANverify addresses only those documents that are submitted in the required orientation. Documents with a portrait or landscape view must be scanned right side up.
All standard documents will be verified based on the regular verification process.
Brokerage statements received from IRA accounts - (eg: IRA, 401Keogh plan, Pension plan, and Defined Benefit plan) are not captured. Documents with some indication on a 1099-MISC or 1098 that it belongs to Sch C or Sch E, etc. are moved to specific schedule under Child Form Association wizard. If more than 1 entity exists, then verifier specifically looks for the information on the document that identifies the schedule and then moves the document accordingly. If no matching Proforma is available or a verifier is unable to identify where the document belongs (due to unclear proforma), then the document will be left unmatched and later will get indexed into "Unassociated Documents" node in SPbinder.
Personal Information (e.g., address, spouse details, email address) values extracted from OCR during verification are prioritized over the proforma information in the tax software. This is because fields like occupation, address, spouse, and email may change year to year. Therefore, the system may replace proforma'd values with the latest extracted value from an Organizer form.

On a brokerage statement, Investment expenses will only be captured for California (CA), New York (NY), New Jersey (NJ), and Hawaii (HI).

State K-1’s – State K-1’s are only captured if it follows after the Federal K-1.
Schedule K-1(1065), where the type of entity is IRA, 401Keogh plan, Pension plan or Defined Benefit plan, is not captured.
No data from Sch K-1 is captured except EIN, Payer Name, and SSN, if the ‘Bookmark only’ barcode is placed on the Federal K-1. Please avoid placing barcodes on Cover Letter pages for Schedule K-1 and Consolidated statements.
If the text 'Do not Use Part III….See 2024 Supplemental Information Statement' is written on the first page of PTP K-1, then no data will be captured; it will only be bookmarked.
For a 2024 tax year binder, if the tax year on the Federal Sch K-1 document does not match the tax year of the binder, then the data is captured based on the fiscal year-end. Example: In 2024 tax year binder, if the tax year of the Schedule K-1 document shows 2023 on top of the document (in bold) but the fiscal year ends in 2024, then all data is captured/verified from that Schedule K-1.
If the Fiscal Tax year ends in 2025 then the document will be considered for the next tax year. No data will be verified /captured.
Federal K-1 and Supplemental pages (K-3, State K-1) should be placed at the end of the source document file. Click here to learn more about scanning and ordering K-1 documents. Note: To prevent the K-1 and its supplemental documents from unlinking with each other, do not place another source document between the K-1 documents (e.g., Form W-2).
When Schedule K-1 and Grantor letters are submitted together with the same information, the K-1s will take precedence to prevent duplicate data from being captured from both documents. The Grantor letter will be bookmarked without data being captured.

Form 1116: Foreign Tax Credit information
Passive Foreign Investment Companies (PFICs) (Starting 2024 TY)

South Carolina State K-1 has a 1099-MISC document after it
The 1099-MISC document has 'SC Only' on the document.

SurePrep Standards

Proforma'd Entity with text "Enter Payer Name" - SurePrep Verification team will not associate any document to the proforma'd entity with text "Enter Payer Name" while processing post wizards like CFA and NFR. The document will be left unmatched.
The following forms are placed in different folder locations in the SPBinder when left unassociated (unmatched) to the Child Form Association (CFA) wizard (Click here to learn more):
Form 1099-MISC : Miscellaneous Income
Form 1099-K : Merchant Card and Third Party Network Payments
Form 1098 : Mortgage Interest Statement
Form 1099-NEC
Form 1099-G
Form 1099-PATR

Grantor letters get auto indexed based on the domain settings. Default Tax Form Setup allows you to specify the forms in the tax software to which you want the SPbinder information to be exported.
For example, if you need 'Grantor Letter' information to export to individual 'Schedule K-1' form instead of the default consolidated statements. In that case, you can change the default tax form. When the information is exported from SPbinder to the tax software, the information will go to the form you specified. Please note, that this is a firm-level setting and will apply to all users at the firm.
Note
: The document will first prioritize the match with an existing proforma. If no match is found, then a new folder will be created under the default input form set by your firm.

Review of Work done by 1040SCANverify Process

Stamps

Additional Resources