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.