Understanding Lacerte diagnostic ref 52131

When preparing an Individual (1040) return and there is a DPAD adjustment, you may encounter the following diagnostic:

• e-file: Electronic filing is not allowed if taxpayer has a domestic production activities deduction passed through from an agricultural or horticultural cooperative under DPAD 199A(g) (section 199A(g)).  This return must be filed as a conventional paper return. (ref. #52131)

The current e-file business rules do not include/require this adjustment statement. Because of this, the IRS will send a notice to the Preparer or Taxpayer adjusting the line in question (removing the adjusted amount).

If this diagnostic is disabled, the return will transmit and may be accepted. However, IRS e-file business rules do not require/include the statement showing the DPAD adjustment will result in a notice.