Service and Resources
Check out the Tax Data Exchange Services App
The New Industry Standards
- Replace OCR and PDF parsing with a more reliable and simpler-to-implement technology. See details
- Support democratization of tax document data so that all tax software companies can offer data import features
- Expand to over 50 the number of tax documents and statements for which standards are defined
- Standardize and improve API authorization and security.
The site references older standards to support migration to the newest standard, Financial Data Exchange (FDX).
What is Electronic Distribution?
Electronic distribution is making annual tax document data available in computer-readable form through one or more of the below channels.
Advantages of Standards-Based Electronic Distribution
Eliminates need for manual data entry
Reduces the tedium and errors associated with manual data entry in the income tax return preparation experience.
Eliminates need for Optical Character Recognition (OCR)
OCR reliability is questionable. OCR requires proprietary solutions. You can replace digital-to-paper, paper-to-digital processes with processes that are digital from end-to-end.
Standards-based JSON files are superior to both CSV and TXF files
CSV files require proprietary programs to process. Documentation and support of the TXF standard has dwindled and has now been fully-replaced by new standards.
For many taxpayers, income tax preparation can be reduced to 3 steps.
(1) Collect digital documents, (2) import, and (3) review the results.
What are the Available Standards?
FDX
Financial Data Exchange
- API & web download
- JavaScript Object Notation (JSON)
- Since 2019
- Updated each October and January
- Newest, modern standard
OFX
Open Financial Exchange
- API & web download
- Extensible Markup Language (XML)
- Since 2003
- Updated annually in October
- OFX consortium joined FDX in 2019
TXF
Tax Exchange Format
- Web download
- Structured text
- Multi-line records
- Special characters delimit logical records
- Since 1991
- Last updated 2013
FIRE
Filing Information Returns Electronically
- Form issuers upload to IRS using web application at https://fire.irs.gov
- Fixed length records
- Specified columns for data
- Official specification at IRS Publication 1220
Make tax time less challenging
for recipients of your annual tax documents.
What is Your Company's Grade?
Your company supplies the annual tax documents required under the law. But could you do better at making it easy for tax document recipients to get the tax document data into their income tax return?
| If Your Company... | Tax Document Format | Delivery Method | Your Grade Is | Why? |
|---|---|---|---|---|
| Only mails annual tax documents | Paper | D | You are requiring your tax document recipients to (1) manually enter their data into tax software or (2) use proprietary Optical Character Recognition (OCR) tools and processes | |
| Provides for download of tax documents in PDF format from a secure website | Download | C | You are speeding delivery of tax documents and saving paper and postage costs but you are requiring your tax document recipients to (1) manually enter their data into tax software or (2) use proprietary PDF parsing tools and processes | |
| Provides download of tax document data in proprietary format (e.g. CSV) from secure website | CSV | Download | B- | You are potentially sparing your tax document recipients the tedium and errors associated with manual data entry but you are requiring proprietary file parsing software for your particular file format. |
| Adds QR codes to your paper and PDF tax documents | Barcode | Smart Phone App | B | When you use this technology your tax document recipient just needs a smart phone and a tax software app that supports QR code scanning. |
| Provides for download of tax document data in an industry-standard format (i.e. FDX JSON, OFX XML, or TXF) from secure website | FDX JSON, OFX XML, or TXF | Download | B+ | You simplify the tax return preparation experience for your tax document recipients so they can (1) download, (2) drag, and (3) drop the data file you provide into tax software that supports import of these types of data files. |
| Provides tax software import of tax document data via industry-standard API (OFX API) | OFX XML | API | A | Your tax document recipients can directly and securely import their tax data into participating tax software applications. |
| Provides tax software import of tax document data via industry-standard API without requiring user account credentials (FDX API) | FDX JSON | API | A+ | When you use the Financial Data Exchange standards for tax data APIs, you are using the newest, most secure, standard for tax data exchange. You are applying the five core principles of user permissioned data sharing: Control, Access, Transparency, Traceability and Security. |