Texas Franchise Tax

[sherylmac]

Does anyone know how to fix the following diagnostic:

e-file:  If your combined group's total revenue for the year is less than $2,470,000, you do not need to file an Affiliate Schedule (Form 05-166).  If you are electronically filing, make sure to exclude these forms before filing any Information report.

If you take off the combined information, then it also takes off the public information reports for the other entities.  So frustrating have to deal with this rejection every time you go to e-file.

Lacerte has really dropped the ball with the Texas forms this year.  No filing instructions if there is just a Texas Public information report required and the form is not even listed on the transmittal letter (it is having to be inserted manually-makes for a lot of extra work on something that is so simple to fix).  Client still needs to know that a public information is required, and it should be listed on the transmittal letter.

[IntuitGabi]

HI @sherylmac. Thanks for the report on 2023 SCO TX E-file Critical Diagnostic Ref. 60175 Generates When 05-166 is Produced With 05-102 

This unexpected behavior has been reported to development for further review. 

[Wanda S]

We have also been dealing with this issue for most of this filing season. A few weeks back, Lacerte gave us a box to check that would exclude Form 05-166 Texas Affiliate Schedule when filing a combined group that only needs to file Form 05-102 Public Information Report. So we "processed" a lot of returns for client review & signature and we now are getting those signed authorizations back and ready to actually e-file the returns. However, the diagnostic is BACK and the check box is GONE!!! This is a critical diagnostic that gives us NOTHING on how to resolve the issue. We are now less than 30 days from the due date for these reports and can neither file them nor file an extension for them. SO VERY FRUSTRATING. Anything you can do on our behalf to reach out and find a solution for us or an anticipated fix date would be GREATLY appreciated!

Critical Diagnostic Warning "e-file: If your combined group's total revenue for the year is less than $2,470,000, you do not need to file a Tax Affiliate Schedule (Form 05-166) or Common Owner Information Report (Form 05-177) alone. If you are filing electronically, make sure to exclude these forms before filing any information report. If you do need to file those forms, you can include them with the return by overriding the franchise tax calculation method and file it as a conventional paper return. (ref #60174)

How do we exclude these forms?????

[Beth S - CPA]

Replying here to agree and to get updates on this matter. The PIR/OIR needs to be listed in the client letter / filing instructions, even if an actual franchise tax return is not being filed. We also have many Texas eFile authorizations coming back, and we want to get ahead of these before D-Day on May 15! Intuit/Lacerte - PLEASE resolve these new Texas issues ASAP!

[sherylmac]

Any update on the Texas Franchise Tax returns e-filing issues.  We need a solution to this as soon as possible.  The deadline is May 15, 2024 and we need to be able to e-file these returns before then.  This has been going on all tax season.

[dmwBH]

My firm has called the Comptroller's office multiple times and spoken to different agents and each has said if the combined group is under the 2.47M limit then each affiliate now has to file it's own public information report since there is no combined report to file.  That should mean we delete all the affiliates from the combining entity's affiliate screen and file the PIR for each entity on its own.  If the combined group had 4 affiliates, we are now filing 5 separate PIR's instead of one return with 5 PIR's attached.  Seems like a lot more work for us but that's what the state is telling us.

[sherylmac]

Thank you for the information.  Lacerte needs to address this issue.  There needs to be a way to exclude the combined report so that the Public Information Reports can be filed.  Having to setup each one separately is going to be a task and then what happens next year when the receipts are over the threshold, and you have to recreate everything again.  This is creating a lot of unnecessary work.  Come on Lacerte, we pay a lot of money for this software, FIX IT!

[IntuitAlicia]

Wanted to post this to let you know we're looking further into this. Specifically looking into the discrepancies between the program behavior/changes, the diagnostic messaging, and our supporting content.

[nwempe]

Does anyone know for TX Franchise tax if you have a "Passive" entity below the $2.47 million threshold do you only file the EZ Form and mark it as "passive"?  Is there still no P.I.R. required for a "Passive" entity?

[IntuitAlicia · Accepted solution]

Regarding the diagnostic messaging, specifically the portion that indicates "If you are filing electronically, make sure to exclude these forms before filing any information report."

The program does not provide a way to suppress these forms, other than removing the input that is triggering them. Once the details are removed, the information report can be electronically filed and will not be rejected due to the 05-177 or 05-166 no longer present in the filing.

Note: If either the Form 05-166 or 05-177 is required to be included in your filing, the return will need to be paper filed.

[sherylmac]

Thanks for the reply but this is no help at all.  Creates more work because if you remove the forms that are creating the combined returns then it deletes the Public Information Reports for the Affiliates.  We will then have to separately setup and create each one as a new return.  Lacerte really dropped the ball on this one!! 

[lweinzapfel]

Why did Lacerte take away the original fix that allowed you to check a box to exclude the 05-166 affiliate schedule? While that fix was active for several days, we successfully e-filed several combined reports. Now we're back to the critical diagnostics. 

[Beth S - CPA]

Not Helpful! Not Solved! We can't just take away those inputs because they start with the federal return. There WAS a fix to get around this - please give it back. Better yet - set up the program so that it GETS what's going on with Texas now and provides inputs, processing, and forms that reflect the new laws. C'mon. We pay a lot of money for this. You'd think Lacerte/Intuit could afford to make it right.

[Mary Ann3]

The question really goes back to why Intuit dropped the ball on the Texas combined reports.  Legislation passed in May 2023 so they had plenty of time to handle writing the updated software.

It's not just Lacerate that is having issues but also ProSeries and probably ProConnect as well.

Yes this is an extremely time consuming task to create new client files just to e-file a Texas Public Information Report.

In ProSeries we can uncheck the combined button, but we have no way of knowing if all of the affiliates Public Information Reports will be e-filed or is it just the one that is allowed to have an XT webfile number.

It is also very hard to find information regarding this issue. 

[nwempe]

We're just filing most of ours via the TX Comptrollers webfile versus setting up new files in Lacerte.  To us it's easier and cheaper.  Maybe our situation is less complicated than some.

[IntuitAlicia]

Note: If either the Form 05-166 or 05-177 is required to be included in your filing, the return will need to be paper filed.

[lweinzapfel]

But what if we DON'T need to file that form. How do we file a combined PIR report in Lacerte in the partnership module? It is working in the s-corp module but not partnership module. There used to be a fix in Lacerte, and you could check a box to exclude those forms. Now that fix is gone.  The filing deadline is in 9 days. 

[sherylmac]

That is the whole point of this conversation.  We do NOT need to file the 05-166 or the 05-177 forms because the receipts are below the threshold.  We need to file the PIR reports.  We need to be able to exclude the 05-166 or 05-177 that is generating with the return because it is a combined TFTR.  TELL US HOW TO EXCLUDE THOSE FORMS.  The deadline is next week.  Lacerte has known about this issue since January 2024.  We should not have to paper file returns. 

[sherylmac]

So, I guess Lacerte is just going to ignore the Texas return filings issues.  We pay a lot of money for this software to have to paper file returns.  It will not help us this year, but we are changing to Ultra Tax because they will fix a problem when it arises not just ignore it.  Lacerte is not the same product that it used to be, and the customer support is nonexistent.