[February 08, 2002] This document references several initiatives in which XML vocabularies and schemas are being developed for the processing and exchange of tax-related information. [Provisional status only; please contribute URLs for additional coverage.]
- Tax-Related Projects
- OASIS Tax XML Technical Committee
- Tax Information Group for ECommerce Requirements Standardization (TIGERS)
- UK Inland Revenue
- Inland Revenue XBRL Working Group
- TAX eXtensible Markup Language (TaXML)
- Tax Markup Language (TaxML)
- IRS (US Internal Revenue Service)
- QuickBooks Extensible Markup Language (qbXML)
- Open Applications Group Integration Specification (OAGIS)
- General Articles
- Announcement 2002-11-11: "OASIS TC Call For Participation: Tax XML TC."
- "OASIS Members Form Tax XML Technical Committee." Press release 2002-12-09.
- Tax XML TC website
- "OASIS TAX XML TC: XML Position Paper for Tax Administrations." Version 1.0. June 2004. 34 pages.
Through the Inland Revenue XBRL Working Group, the IR has made a substantial commitment to "using XBRL as the component of Corporate Tax filings. XBRL will be used because the bulk of a corporate tax filing is taken up with statutory accounts and what is called the 'computation', i.e., the derivation that goes from the statutory accounts and includes adjustments, calculations, depreciation calculations, etc. IR and the vendors are committed to a timeline for adopting XBRL filings so as to avoid an indefinite period in which 'electronic filing' of this data is nothing more than PDF and other file attachments... The IR has looked seriously at the business case for electronic filing [not merely taking a paper process and moving it as-is to electronic form] -- looking at the broader context of what's good for filers, vendors, and tax administrators, and others..." [adapted from a communiqué of Walter Hamscher]
- UK XBRL taxonomy; Taxonomy schema for XBRL (extends the W3C XSchema schema with several linking structures useful for XBRL taxonomies); XBRL schema for Company Tax Return, Form CT600.
- "Inland Revenue CT E-Filing. The Business Case for XBRL." By PricewaterhouseCoopers and Walter Hamscher (Standard Advantage). 12 pages. Revision 1, 20-December-2001. "The UK government has made a broad and deep commitment to establishing a sound technical foundation for e-Government. Within this framework, there is a requirement for standardising data tags and vocabularies across government departments. CT e-Filing is an Inland Revenue initiative that will allow corporate entities to file form CT600 electronically using Extensible Markup Language (XML), along with XML Schema, which defines the arrangement of XM L data in a file. This builds on similar XML implementations for SA and PAYE forms. To that end, the Inland Revenue development team has created a standardised set of data tags and structures for representing the CT600 in XML. This was released for consultation to tax and accounting software vendors on 22-November-2001. In the commercial world, over 120 software vendors, accounting firms, and users of financial data have formed an independent consortium in order to standardise the data tags and vocabularies for business reporting, using XML and XML Schema for the same reasons that the Inland Revenue chose to do so. The resulting specification is the eXtensible Business Reporting Language (XBRL) and the community is XBRL.org. What XBRL adds to XML Schema is a framework for defining financial and business performance terms to be used consistently within and across many different software applications. The terms have a fixed meaning, defined and endorsed by professional associations and independent of any particular software application. The framework then allows those terms to be organized in any given business form or report along dimensions that are common in reporting: business entities, the period of reporting, and classification with respect to the type of each data item. Furthermore, XBRL is accompanied by a growing number of vocabularies covering large areas of accounting and financial data -- a core set of UK accounting concepts being among those vocabularies..." [from the author]
- XBRL Symposium for Tax Filings
- Electronic Form 990 Data Transfer Demonstration. Form 990: "Return of Organization Exempt From Income Tax." Uses XBRL, an XML specification for reporting of business information. "The purpose of the demo is to demonstrate how XBRL/XML could be used in a proposed 'Form 990 Electronic Reporting System (FERS)' for annual reporting and registration with state charity offices. This would reduce costs for entering data and to others who make use of Form 990 information, such as the National Center for Charitable Statistics and GuideStar/PRI."
- "IR CT6000 Tax Form for U.K. Commercial and Industrial Companies." A Taxonomy for the creation of XML-based instance documents for CT6000 filing of businesses according to Inland Revenue. Used XBRL Specification dated 2000-07-31. "This documentation explains the XBRL Taxonomy IR CT600 Tax Form for U.K. Commercial and Industrial Companies, dated 2000-03-12. This taxonomy is created compliant to the XBRL Specification, dated 2001-03-12. It is for the creation of business tax CT600 form filing with the Inland Revenue in compliance with its revenue code..."
- "General Electric Implements enumerate Software To Streamline Financial Reporting." - "Software developer enumerate Solutions, Inc. today announced that the Corporate Tax Department of General Electric, the world's eighth largest corporation, has signed a contract to use enumerate's software tool -- the XBRL Creator -- to simplify and speed its tax reporting processes. GE will use enumerate's technology to more efficiently coordinate and consolidate financial information from its global subsidiaries. 'GE's federal tax return -- running more than 40,000 pages -- is the largest return received by the Internal Revenue Service (IRS),' said Steve Francis, Director of Tax Systems at GE. 'To generate the return, we must gather and evaluate information from over 150 distinct general ledgers, each with its own financial system. It's both time consuming and error-prone.' XBRL Creator, based on the new reporting standard known as eXtensible Business Reporting Language (XBRL), will now allow GE to streamline its tax reporting processes..."
- See: "Extensible Business Reporting Language (XBRL)."
TaXML is said to be/provide "an open, XML-based standard for the global exchange of tax related information." Send requests for information to email@example.com. [To be] launched January 30, 2002 or later.
[2002-01-21] Note from Michael Roytman (Vertex Inc.): "TaXML organization, represented at http://www.taxml.org, which is in process of development and will be available next week [2002-01-27], is an organization promoting the development of open, XML-based standard for the global exchange of tax related information. Vertex Inc., as an organization in the tax domain, has been working on TaXML for a number of years and is ready to collaborate with other participants in the tax compliance process. This initiative is not associated with Microsoft Corp[oration's Tax Markup Language (TaxML) endeavor], however we do invite software vendors and solution providers to participate and contribute to the development of TaXML..."
TaxML is noted as a proposed XML vocabulary in documents from Microsoft.
- "An Open Standard for Tax Data Interchange Using TaxML." Microsoft Business 'E-Gov' web site. January 22, 2001. "One of the great benefits of the Internet is the development of open standards that allow heterogeneous systems to interoperate. Because of this, Internet users can exchange information using dissimilar e-mail, networking, directory and operating systems. Web-based technologies and standards, such as the markup languages HTML and XML, empower them to conduct their business more efficiently and successfully... The Tax Markup Language (TaxML) is a proposed vocabulary defined using XML specifically for tax data. As such, it allows clear identification of tax items by using terminology drawn from the discipline of taxation. The authors that created the tax data hierarchy are tax professionals with many years of commercial tax software development experience. Much thought and effort has been invested into making a substantive start on the huge project of standardizing tax data using XML. The work represented by TaxML is only a starting point for government, the tax industry, and the software industry to use, as the XML strategy is pursued. In addition, government and the tax industry will probably adopt Extensible Style Language (XSL) style sheets as well..."
- "Tax Administrations Lead the Way To Provide High Quality Online Public Service." Microsoft 'Public Sector' [E-government to people] web site. May 2001. "... As a subset of XML, the Tax Markup Language, or TaxML, defines a way to format tax information so that the many heterogeneous systems within and outside tax administrations, including legacy systems, can capture, transmit, and store data consistently. The open TaxML vocabulary allows clear identification of tax items by using terminology drawn from the discipline of taxation. The authors that created the tax data hierarchy are tax professionals with many years of commercial tax software development experience. Much thought and effort has been invested into making a substantive start on the huge project of standardizing tax data using XML... Terry Lutes of the Internal Revenue Service, which has the most frequently visited public sector web site in the United States, believes XML is the new industry standard for data exchange. He says it will ease tax compliance and lower costs for taxpayers, and result in shorter audit cycle times, fewer errors and reduced costs for validating returns. It will also make for easier transitions when there are tax changes. 'We're not about using technology to do things the way we did in the past,' says Lutes. 'The question is how to do business with the technology we've got and to rethink the fundamentals.' The IRS has started work on developing TaxML schema directly from Microsoft's work on XML and from that done for state sales tax. The state of California is using a similar approach, and standards are being developed by the Tax Information Group for EC Requirements Standardization (TIGERS), which consists of the IRS, state governments, service providers, industry and other interested parties involved in taxation and finance. Meeting six times annually, the TIGERS group aims to create guidance useful to government tax authorities to assist them in contractor or in-house XML application development. It is examining a variety of tax filing types (personal income, sales, motor fuel, corporate income, etc.), together with new and informed thinking about how to represent these in XML..."
A number of XML schemas have been developed for use in the IRS Tax e-file system. See the references that follow, including the main reference document.
References: [if the links below are broken, access http://www.irs.gov/ and use the Search facility to locate XML-related documents]
The XML DTDs used in the 'QuickBooks Extensible Markup Language' (qbXML) have many elements for tax-related information. This application illustrates the need to formally model "tax-related" information within the broader scope of government jurisdictions which levy taxes, and in concert with financial/ledger/accounting models that are part of corporate and personal concern.
See references in "QuickBooks Extensible Markup Language (qbXML)."
OAGIS is an example of an XML-based e-business application that necessarily addresses tax-related information in message transaction definitions. OAGIS version 7.2.1 provides (1) 60 Collaboration Definitions; (2) Support for SOAP, ebXML, RNIF, BizTalk; (3) 201 XML Message Definitions; (4) XSD and DTD Support. This is actually the 16th release, some seven (7) years in maturing. Ongoing content projects include supply chain execution; product development collaboration; invoice settlement; shopping cart; party ID enhancements; warranty; PO contracts; financial services.
Appendix F in the Open Applications Group Integration Specification [OAGIS] version 7.2.1 contains a description of how to properly use the TAX and DISTRIBUTN Data Types in a Business Object Document (OAGIS BOD). A revision effort required the addition of a Tax Data Type for the Sync Salesorder BOD and for each BOD having a CHARGE Data Type. For OAGIS version 6.x, "Taxes are handled differently for each of these two types of documents. (1) Financial Documents: For financial documents such as Receivables and Payables, the tax information is handled on the line on the document, thus obviating the need for a separate TAX Data Type. The tax lines on the receivables or payables document are identified by the Field Identifier TAXLINE. The use of the TAXCODE Field Identifier is used to identify a description or a possible tax table. The General Ledger information for the taxes in this case are contained on the line of the financial document itself or within the DISTRIBUTN Data Type attached to the line. (2) Operations Oriented Documents: For the operations oriented documents such as Purchase Order and Sales Order, the taxes are handled by adding the Charge Data Type to the header and lines of the document. This Data Type currently does not contain any General Ledger information such as GL Nominal Account or Cost Center..." See references in "Open Applications Group."
[April 18, 2007] "NIST MIP XML Tools Support Testing Against IRS Naming and Design Rules." By KC Morris [WWW]. NIST Announcement. "NIST is pleased to announce that IRS NDR tests are now available on NIST's XML Quality of Design (QOD) website Two enhancements to the website have been made. In collaboration with the Internal Revenue Service we have posted a testing profile for the adherence of XML schemas. The test profile may be used by developers of XML schemas for the IRS to see whether their are meeting the IRS guidelines. The tests for these guidelines were developed by the IRS. The second enhancement to the site is the addition of an "example page." This page is for users who want to see how the tool works. It allows a user to click on links to reach the various parts of the system, as well as, to execute some test. The page contains three sample Schematron rules encoded based on selections from the Department of Navy Naming and Design Rules (NDR) document. Each rule has associated with it two schemas: a "pass" schema with no errors and "fail" schema containing errors. The page demonstrates how to execute the rules with these schemas. The QOD tool is one of several provided by NIST for developing XML schemas for the purpose of data exchange and systems integration." From among the tools: (1) 'Naming Assister' improves schema readability and consistency, consequently speeding up future schema adoptions and implementations and provides consistent naming conventions for elements and types based on ISO 11179; (2) 'Naming Report' generates a list of terms used to construct the schema's elements, type, and attributes names; (3) 'NIST XML Schema and Validation Web Services' is a web service that can be used to remotely validate XML schema files; (4) 'Schematron Editor Tool' is a Java-based GUI tool to easily create, view, and modify Schematron constraint specification files for validating XML instances. See also the XML Testbed description.
[April 02, 2007] "Taxpayer Advocate Backs IRS E-File Portal Concept." By Mary Mosquera. From Federal Computer Week (April 2, 2007). "Increasing numbers of technology-savvy filers prepare their tax forms using Intuit's TurboTax or H&R Block's TaxCut software. But when it comes to filing their returns, many of them revert to paper. Of the 37.1 million individuals [in the U.S.] who prepare their taxes on computers, 40 percent, or 14.8 million, submitted their tax returns in paper format. A portion of the population can file free through the Free File Alliance, a group of tax preparation firms that provide their e-filing services free to people whose incomes are less than $52,000. IRS Commissioner Mark Everson said proposals to create a free e-file IRS Web site and require tax practitioners to e-file would put unnecessary stress on the IRS. Everson added that he was concerned that creating an IRS e-file Web portal would create competition between the private sector and the IRS that might undermine confidence in the tax system. Large corporations can e-file directly using the IRS' Modernized e-File system. That system depends on Extensible Markup Language (XML) to identify, store and transmit data. The IRS plans to eventually migrate its 1040 tax forms to the Modernized e-File platform. Some experts say that widespread use of the XML standard would increase competition among tax preparation software makers, and e-filers would not have to pay transmitters, such as Intuit, to batch and deliver their tax returns to the IRS. An IRS portal could act as a catcher's mitt, receiving XML output files from many tax preparation competitors. The IRS might need a push from Congress before it would create a free, direct-file Web portal, Olson said. Both Republican and Democratic chairmen of the Senate Finance Committee have urged the IRS to offer a Web site for free direct filing..." See also U.S. IRS and SGML/XML for Tax Filing.
[October 11, 2002] "Consortium Aims to Boost Electronic Tax Filing." By Gretel Johnston. In InfoWorld (October 11, 2002). "The U.S. Department of Justice (DOJ) has given its blessing to the creation of a consortium that would work with the Internal Revenue Service (IRS) to provide free electronic tax preparation and filing services. The consortium, which still awaits the approval of the U.S. Treasury Department and the Office of Management and Budget (OMB), has not been formed, but is expected to be in place for the 2002 tax season, according to officials who have been working with the government to move forward with the public-private project. The program would help the IRS achieve its goal of receiving 80 percent of all U.S. tax returns electronically by 2007, and would assure companies that provide electronic tax preparation and filing services that the government will not get into the business of providing those services for free. The DOJ did not list the companies that will comprise the consortium, however, Scott Gulbransen, a spokesman for the tax software specialist Intuit, confirmed Thursday that Intuit will be a member... An estimated 1 million taxpayers took advantage of Intuit's Tax Freedom project when filing their 2001 returns, Gulbransen said. The 5-year-old program, which provides free tax preparation and filing services to people with adjusted gross incomes of $25,000 or less, is an example of how free services will be provided through the IRS Web site once the program is fully established, Gulbransen said..." See (1) "US Internal Revenue Service Establishes Online XML Developers' Forum for Employment Tax E-file System"; "US Internal Revenue Service and SGML/XML for Tax Filing."
[July 20, 2001] "Edging Toward E-Gov." By Mark Leon. In InfoWorld (July 20, 2001). "A few years ago, the California Board of Equalization began plans to build a Web site that businesses could use when filing sales taxes. But when Y2K got in the way, the Sacramento, Calif.-based board teamed up with Nationtax Online, a Birmingham, Ala., company specializing in online business tax filing systems, says John Hamlin, e-filing technical project manager at the board. Nationtax created the Web interface, but Hamlin and his team had plenty to do before the site -- which serves approximately 700,000 taxpayers -- went live in January. Governments are stereotyped as the last place to look for technical innovation, but Sharrard says the Internet gives them a chance to be perceived differently; California's Board took the innovative step of adopting an XML database. Hamlin says the board uses Software AG's Tamino, 'a native XML database so that storage is efficient and we don't have to deal with all the issues of translating XML into a relational format. ... Electronic filing for our taxpayers naturally led us to XML,' Hamlin adds. 'It was clearly the best way to handle data and tax forms over the Internet'..."
[August 15, 2001] "Electronic Filing of Sales and Use Tax Returns." By John Hamlin (California Board Of Equalization). Presented at the Federation Of Tax Administrators 2001 Technology Conference (spokane, washington, USA; August 12 - 15, 2001). 13 slides.
"Agency Turns to XML for Tax Returns." By Dibya Sarkar. In Federal Computer Week (January 02, 2001). "The California State Board of Equalization plans to allow businesses to file sales and use tax returns online and use Extensible Markup Language (XML) to store and retrieve such data. The project is set to launch early this month. The state agency would enable businesses to file tax returns through certified third-party Internet application service providers, according to project manager Ray Greenhouse. The ASPs would then transfer the data to the state agency, which will use XML as middleware... 'The advantage of using XML is that it allows us to keep our proven mainframe systems in place without having to modify them,' Greenhouse said. 'The Board of Equalization recognizes that XML is the electronic data interchange format of the future. It's helping us to move into e-government'..."