Outline Transcript Links Bios

Tim Berger: Hello. I´m Tim Berger, a Tax Law Specialist with the IRS, and on behalf of the Affordable Care Act Office, I thank you for attending this presentation on "Understanding Error Reports for ACA Information Returns." The information in this presentation is current as of July 15, 2016.

For the latest information about the AIR Program, visit IRS.gov and search using the term "AIR." In order to comply with the ACA Information Reporting Requirements, many employers and health-coverage providers are required to file Information Returns with the IRS.

These Information Returns can be filed electronically using the AIR System, and when filing, you may receive certain error messages.

Today we will discuss some of the details regarding AIR error reports, specifically we are going to cover the types of errors the IRS identifies and how they are reported, details about the user interface, or UI Channel, and the Application 2 Application, or A2A Channel, and what to do when you see an error report.

At the end of this presentation, you will also find additional resources that may be helpful to you.

I mentioned we´re going to get into some detail about UI and A2A.

This presentation will provide some background regarding these channels, explain how AIR errors are reported and can be viewed in both UI and A2A, how to interpret the information in those error reports, and what to do once you have identified the errors.

This presentation will not explain the Penalty Administration process.

A recorded presentation on the reporting requirements, correction process, and penalties has been posted in IRSvideos.gov.

It will be linked in the appendix of this presentation.

Much of the information in this presentation can be found in the AIR Submission Composition and Reference Guide and Publication 5165 Guide for Electronically Filing Affordable Care Act, ACA, Information Returns for Software Developers and Transmitters, Processing Year 2016.

It is recommended that you have both of these resources available to reference as you watch this presentation.

They are also linked in the appendix of this presentation.

Also included at the end of the presentation is an acronym guide of technical terms for your reference.

It is assumed for purposes of this presentation that you already have general background knowledge of ACA Information Returns and the electronic filing process through the AIR System.

Additional resources can be found on the AIR website on IRS.gov by using the search term "AIR." As previously mentioned, recorded presentations on ACA Information Return reporting requirements and the correction process can also be found on IRSvideos.gov.

So, what types of errors does AIR identify and how are those errors reported?

The AIR System performs two types of validations against a transmission.

First, a structural validation is performed to ensure conformance of XML data against the published schemas.

When a structural violation is discovered in the transmission file, the transmission is rejected.

Structural correctness means that the data conforms to the published XML schemas.

Next, if the transmission passes the structural validation, then each return in the transmission file is validated to make sure that the data conforms to the published Business Rules.

Conforming to Business Rules means that the relationships among the data elements adhere to the published Business Rules.

When data in the transmission violates the Business Rule that checks data against an IRS database, or when the data otherwise violates a Business Rule, then the return is accepted with errors.

Examples of each type of validation will be given later in the presentation.

So, what exactly are schema, or structural errors?

As mentioned, the structural validation checks an XML document for conformance to a published schema.

In other words, any structural errors received by the AIR System are related to the schema and will result in a rejection.

You can view the published AIR schemas on the AIR web pages on IRS.gov.

The schema validation for ACA Information Returns ensures that a manifest is present along with at least one 1094 and associated 1095 documents.

The required elements and attributes are included, and the data in the document conforms to the specified data types, sizes, and their allowed patterns.

Schema validation errors are identified by the prefix AIRSH followed by the specific error code number as shown on this slide.

Now let´s take a look at the Business Rule Errors.

The Business Rules Validation ensures that all AIR data is processed according to approved requirements and validated according to IRS Business Rules.

You can view the published AIR Business Rules on the AIR web pages on IRS.gov.

Business Rules specify the potential error conditions for each Information Return data element and indicate if the error is reported to the transmitter.

When data elements fail the Business Rules, then errors are generated and reported to the transmitter via status request in the Error Data File.

Additionally, rejections could occur depending on the error condition.

However, if the transmission has been processed by the IRS and errors are reported but do not result in a rejection, then the processing status will be accepted with errors or partially accepted.

Additional details on the processing statuses can be found in the AIR Submission Composition and Reference Guide.

Business Rule validation errors are identified by the prefix AIRBR followed by the specific error code number.

You can see some examples on this slide.

The full error code library can be found within the published Business Rules and the AIR Submission Composition and Reference Guide.

Now we´ll discuss in a bit more detail the AIR transmission methods and how errors will be reported in each method.

Transmitters may choose either a user interface, or UI, which requires a web browser, or a web service interface, or A2A, as a method to transmit ACA Information Returns to the IRS.

In the UI Channel, Information Returns are uploaded as XML files using a web browser.

Users will log into the IRS portal, and, once authenticated and authorized, will be allowed to upload files containing Information Returns.

Transmitters must upload two XML files -- Manifest File, Form Data File.

In the A2A Channel, Information Returns are sent using a request-response web service where the user´s application communicates with the IRS application using SOAP messages with MTOM-encoded attachment.

The SOAP message will carry the credentials for authentication and authorization.

The Information Returns are transmitted in the file as the MTOM-encoded attachment.

For additional information on transmission methods, see the AIR Submission Composition and Reference Guide, Section 2.1 and 2.2.

Now that we´ve outlined the two transition methods, we´ll take a look at the form in which errors are acknowledged in each format.

First we will look at a UI Acknowledgement.

This image shows what will be displayed onscreen.

The download button enables the transmitter to download the AIR Error Data XML File.

For additional information on UI Acknowledgements, see the AIR Submission Composition and Reference Guide, Section 4.7, figure 4-7.

After you click the download button, you will be able to view the Error Data XML File as shown on this slide.

The Error Data File includes the error message code, indicating what the error is, as highlighted in red in boxes 1 and 3, the error message text, explaining what the error is, as highlighted in red in boxes 2 and 4, and the element that was in error.

Note the element that is in error is often in the error message text, however, it is not provided in XPath for Processing Year 2016.

Only one Error Data File will be created for each transmission.

For additional information on UI Error Files, see the AIR Submission Composition and Reference Guide, Section 4.7, Figure 4-8.

The A2A Channel allows transmitters to submit a Form Data File to the IRS and retrieve the acknowledgement for that transmission.

The Form Data File is transmitted in the SOAP message as an MTOM attachment.

The response for a request for acknowledgement may or may not include an Error Data File.

If an Error Data File is produced by the IRS AIR System, it will be returned to the transmitter in the SOAP Response as an MTOM attachment.

MTOM is the only method allowed by the IRS for transmitters to attach files to a SOAP message for ACA Information Returns.

For additional information on A2A acknowledgements, see the AIR Submission Composition and Reference Guide, Section 5.

The normal processing for a transmission is as follows -- transmitter sends a transmission to IRS via SOAP request message.

Transmitter receives a SOAP Response message, which includes the receipt I.D. assigned to and the status of the transmission, i.e., Processing or Rejected.

IRS processes the transmission, transmitter sends a request for acknowledgement via SOAP request message to IRS with the receipt I.D.

corresponding to the transmission for which they are requesting status, transmitter receives a SOAP Response message which provides the status of the transmission, i.e., Accepted, Accepted with Errors, Rejected, Processing, Not Found, and Partially Accepted, and any errors in the Error Data File attached to the SOAP Response message.

The exception path covers the following error processing -- manifest errors, errors relating to transmitter information and/or transmission details, duplicate transmissions, Business Rule errors, system errors.

This slide shows an example of the Form Business Rule Error Text that is received by the transmitter using A2A.

In this specific example, the error message highlighted in the first red box shows the error code, and the second red box shows the corresponding error message, showing that the minimum essential coverage offer indicator, all 12 months, is checked "no" when some, but not all of the corresponding months are checked "no," or any of the corresponding months are checked "yes." The color coding in the messaging may vary depending on the XML tool of used.

For additional information on A2A acknowledgements, see the AIR Submission Composition and Reference Guide, Section 6.4, Figure 6-7.

So, what do you do after you´ve received an error message from the IRS?

The Error Data File contains unique I.D.s to identify which records had errors and error codes and error descriptions to identify the specific errors and often identify the associated data element.

You´ll need to locate and correct the information as follows -- once you identify the error, complete the form with all of the accurate information and mark it as a corrected return.

Do not file a return that includes only the corrected information.

Always apply corrections to the latest record accepted by the IRS.

Your corrected record I.D. must reference the last record that was accepted by the system.

Keep in mind that all correction records are assigned their own I.D.s, just like original records.

Also, your correction records must reference the unique I.D.s of the records being corrected.

Once you have completed the correction and the I.D. is assigned, you´ll file the correction by transmitting the corrected return to the IRS through AIR.

In some circumstances, you may receive error messages from missing and/or incorrect information, but you do not have the correct information available to correct the return.

A common example of this would be if the name and taxpayer identification number, also known as a TIN, of a covered individual does not match the information in the IRS system.

In other cases, you may have reviewed the error and validated that the information is already correct, in which case, you would not be able to file a correction.

In either case, the error message is not a proposed penalty notice 972CG.

Whether you have information available to make a correction in response to the error message depends upon where you are in the TIN solicitation process and whether individuals have declined to provide their TIN.

For more information on the corrections process, see Publication 5165 or the recorded Corrections presentation on IRSvideos.gov.

Okay.

That completes our presentation on "Understanding Error Reports for ACA Information Returns." As mentioned at the outset, here is a list of reference materials you may want to check out for further information on ACA Information Returns and details about the error reports.

Finally, here is a list of some of the acronyms used in this presentation.

On behalf of the IRS, I´d like to thank you for viewing this presentation and hope you found it helpful.