File By Text

File‑By‑Text Individual Tax Filing AI — Ready‑to‑Launch Product Blueprint ($59 flat)Below is a complete, consumer-ready blueprint for a “text like a friend” tax prep product that prepares and e‑files U.S. individual federal returns (Form 1040) using text + photo/PDF uploads, while staying compliant with IRS e‑file program realities (MeF schemas, identity PINs, e‑signature flows, security controls).1) Product Definition (What this is)Product name (working)TextTax — File by Text, $59 FlatPromise (welcome screen copy)“File your taxes by text in minutes — $59 flat. Upload photos of your tax forms, answer a few simple questions, review, then e‑file.”Core principleNo complicated interview forms. The app asks only what it needs, in plain English, and lets the user upload documents anytime.Scope (supported vs not supported)Supported (MVP):

1040 + common schedules/credits (W‑2, 1099s, dependents, EITC if applicable, CTC, simple Schedule C, education credits, mortgage interest, itemize if beneficial).Not supported (hard stops with clear messaging):

Complex entity returns, partnerships/corps, multi-state complexity, advanced crypto trading, trusts/estates.2) Compliance & “How we actually e‑file” (Real-world constraints)IRS e‑file is XML + MeF rulesTo transmit a return, your system (or an upstream provider) must create IRS‑approved XML that conforms to the Modernized e‑File (MeF) schemas and business rules, by tax year. Source E‑signature reality (two main paths)Users must electronically sign 1040 e‑files with a PIN:Self‑Select PIN (user chooses 5 digits + uses prior‑year AGI or prior‑year self‑select PIN; if they have an IP PIN, that can replace AGI for identity verification)Practitioner PIN (user signs Form 8879 authorizing the preparer/ERO to enter or generate the PIN) Source and Source Product choice (recommended for your “file-by-text”):

Use Practitioner PIN + Form 8879 to reduce friction for first‑time filers and people who don’t know prior-year AGI, while keeping the UX “chat-first.” Source IP PIN handling (must not miss this)If a taxpayer (or dependent) has an IRS IP PIN, it must be entereds correctly included or the e‑file can reject; the IRS FAQ notes that e‑file returns can be rejected if an IP PIN is missing/incorrect, and dependents’ IP PINs must be entered for certain e‑file forms. Source Security baseline is not optionalIRS guidance for providers emphasizes safeguarding taxpayer data and implementing protections like MFA and other controls (Publication 4557). Source Provider participation rules (high-level)Participation in IRS e‑file as a provider is governed by Publication 1345 (roles, requirements, sanctions, identity verification, etc.). Source 3) End‑to‑End Workflow (AI + Documents → Return → E‑File)A. Onboarding (60 seconds, conversational)Goal: Determine scope + route + start a secure workspace.“What tax year are you filing?”“Do you want to file federal only for $59, or add state as an optional add‑on?”“Any of these apply?” (chips)“I had W‑2 job(s)”“I did gig work / 1099”“I paid daycare”“I went to college / paid tuition”“I bought a home / paid mortgage interest”“I had health insurance through the Marketplace (1095‑A)”“None of these / something else”If user mentions an unsupported case → polite stop + referral guidance.Disclosure (always visible, plain English):

“AI‑assisted tax preparation. Not a CPA or law firm. You’ll review and approve everything before we e‑file.”B. Upload + Extraction (the “file-by-text” heart)User uploads: photo/PDF of W‑2, 1099s, 1098, 1098‑T, 1095‑A, receipts, etc.System actions (behind the scenes):Document type classification (W‑2 vs 1099‑NEC vs 1098, etc.)OCR extraction to structured fieldsConfidence scoring per field (e.g., SSN, EIN, wages)Automatic validation rules (see section 6)Ask only the missing questionsKey UX behavior:

The assistant should say:

“I found your W‑2 from Acme Corp. I captured wages and withholding. Want me to double-check your name + SSN before we continue?”C. Conversational “Smart Interview” (no forms)The AI asks only what is required to produce a valid return + maximize common credits.Examples:“Any kids you supported in 2025? Tell me their name + birthdate (or upload prior return).”“Did you pay for daycare so you could work or look for work?”“Did you have Marketplace insurance (1095‑A)?”“Do you want your refund by direct deposit? (Upload a voided check or type routing/account.)”D. Return build (1040 data model → MeF XML)Normalize extracted data into a canonical “Tax Profile” objectCompute:Income buckets (W‑2, interest/dividends, Schedule C net, etc.)AdjustmentsStandard vs itemized decisionCredits (CTC, EITC if applicable, education, childcare)Payments/withholdingGenerate:Human-friendly summaryForms package (1040 + schedules)MeF XML package aligned to that tax year’s schemas/business rules Source E. Review + consent + e‑fileStep 1: “Your return summary” screen (chat + card)Filing statusDependentsTotal income (high level)Deductions (standard/itemized)Key creditsRefund / amount dueDirect deposit details (masked)Step 2: ConsentCollect digital signature flow via Form 8879 for practitioner PIN method Source Confirm IP PINs if applicable Source Step 3: Transmit + acknowledgementsSubmit through MeF transmitter (your own or partner)Poll IRS acknowledgement (Accepted / Rejected)If rejected: show the reject reason in plain English and fix in chatF. Delivery“Accepted by IRS” confirmationDownloadable copy: PDF of return + key forms“What happens next” guidance (refund timing, payment options)4) User‑Facing Chat Experience (Copy + Interaction Design)Welcome (first message)“Hi — I can help you file your federal taxes by text for $59 flat.

Upload photos of your tax forms whenever you want (W‑2, 1099, 1098, 1098‑T, 1095‑A).

Before we start: what tax year are you filing?”Upload prompts (gentle, not nagging)“Whenever you’re ready, you can upload your W‑2(s). If you had two jobs, just upload both.”Confirmation style (confidence-based)High confidence: “I found your W‑2 wages and withholding. Looks good.”Medium confidence: “I think your employer EIN is 12‑3456789 — can you confirm?”Low confidence: “This photo is a bit blurry in the SSN area. Can you re-upload a clearer one?”Plain-English explanations (no jargon)Instead of “Schedule C,” say:

“Self‑employment income (like DoorDash, Uber, freelance work).”Unsupported scenario script“I can’t file this kind of return inside TextTax yet (it needs more complex forms). I don’t want to risk doing it wrong. If you want, tell me what you’re filing and I’ll suggest the right next step.”5) File‑By‑Text Interface Spec (Mobile-first)Input typesText chatPhoto upload (camera)PDF uploadMulti-file upload (batch)UI componentsChat thread (primary)Upload tray with quick buttons:

“Upload W‑2”“Upload 1099”“Upload Tuition (1098‑T)”“Upload Mortgage (1098)”Extracted data cards (review):

“W‑2 summary card”“1099‑NEC income card”“Dependent card”Action gates:

“Review return” (locked until minimum data)“E‑file now” (locked until consent + identity checks)Document storage + retrievalEach upload is stored with:

Doc typeOCR textExtracted fields JSONConfidence mapAudit log (“who/when changed fields”)Security UX requirements (visible to user)MFA for account accessMask SSN by defaultSession timeout for sensitive screens(Aligned with the IRS’s emphasis on safeguarding data in Publication 4557.) Source 6) Logic Rules (Extraction, Checks, and “Ask only what matters”)A. Document classification rules (examples)W‑2: detect “Form W‑2” + employer EIN format + wage boxes1099‑NEC: “Nonemployee compensation” + payer TIN1098: “Mortgage interest received” + lender EIN1098‑T: “Tuition statement” + scholarships/grantsB. Core validation checks (examples)Identity & consistencyName across docs matches (soft match)SSN format checks; flag if unreadableDuplicate W‑2 detection (same EIN + wages + year)W‑2 checksFederal withholding cannot exceed wages by unrealistic ratios (flag for review)State wages/withholding present → if you’re excluding state filing, still store but warn user they may need a state return1099‑NEC / Schedule CIf 1099‑NEC exists → ask:

“Any expenses related to that work?” (simple categories)“Did you use a car? home office? supplies?” (only if relevant)DependentsCollect: name, SSN/ITIN, DOB, relationship, months lived with youIf user claims EITC/CTC path: ask residency + support questionsIf dependent has IP PIN and e‑file: must be captured to avoid rejection scenarios described by IRS IP PIN FAQ. Source E‑signature readinessIf using practitioner PIN: require Form 8879 authorization before transmit. Source If self‑select PIN path: require prior-year AGI or prior-year PIN, unless IP PIN replaces it. Source C. Reject handling rules (MeF)If IRS ack = rejected:

Map reject code → human explanationPresent exact fix request (“Your IP PIN is missing” / “Name control mismatch” / “DOB mismatch”)Re‑transmit and re‑poll acknowledgement(MeF schemas + business rules are published by tax year.) Source 7) System Architecture (Practical, partner-friendly)ComponentsChat Orchestrator

Conversation state machineQuestion policy (“ask minimal questions”)Document Ingestion Service

OCR pipelineDoc classificationField extraction + confidenceTax Engine (1040 scope)

Rules + computationsForm mappingsCompliance Layer

Unsupported detectionSecurity gates (MFA, audit logs)Consent gating (8879 / signature)E‑File Layer

MeF XML generator (by tax year schema)Transmitter integrationAck polling, reject repair loopReturn Delivery

PDF packagerSecure download links“Build vs partner” decisionTo truly e‑file, you typically either:Become an authorized provider/transmitter/ERO stack yourself (more time), orPartner with an existing authorized e‑file provider/transmitter and integrate.Either way, your product UX stays the same; only the e‑file layer changes.8) Pricing & Monetization (clean $59 promise)Checkout moment (recommended)Charge $59 right before “Review & e‑file” (once scope is confirmed and forms are ready).

If user turns out unsupported, no charge.Optional add-ons (separate, clear)State returnAudit supportHuman review9) Required Disclosures & Confirmations (copy you can ship)Persistent footer“AI‑assisted tax preparation. Not a CPA or law firm. Review required before filing.”Pre‑e‑file confirmation checklist“I reviewed my return and it’s accurate to the best of my knowledge.”“I confirm my filing status and dependents are correct.”“I consent to e‑file and signing electronically (Form 8879 if applicable).” Source “If I (or my dependent) have an IRS IP PIN, I entered it correctly.” Source 10) Launch Checklist (MVP → Production)MVP must-havesW‑2 + 1099‑NEC flowsDependents + CTCBasic Schedule C expensesEducation credit intake (1098‑T)8879 consent flow + secure record retentionRejection repair loopSecurity must-haves (minimum bar)MFAEncryption in transit/at restAudit logsBreach response plan alignment to Pub 4557 guidance Source Sources Used (authoritative)IRS MeF schemas & business rules for individual returns (by tax year):

https://www.irs.gov/e-file-providers/modernized-e-file-schema-and-business-rules-for-individual-tax-returns-and-extensions IRS Topic No. 255 (signing e‑file returns; self‑select vs practitioner PIN):

https://www.irs.gov/taxtopics/tc255 IRS Form 8879 overview (practitioner PIN authorization):

https://www.irs.gov/forms-pubs/about-form-8879 IRS IP PIN FAQ (requirements and e‑file implications):

https://www.irs.gov/identity-theft-fraud-scams/frequently-asked-questions-about-the-identity-protection-personal-identification-number-ip-pin IRS Publication 4557 (Safeguarding Taxpayer Data):

https://www.irs.gov/pub/irs-pdf/p4557.pdf IRS Publication 1345 (Authorized IRS e‑file Providers handbook):

https://www.irs.gov/pub/irs-pdf/p1345.pdf Two quick questions so I can tailor the “ready-to-launch” spec to your build planAre you planning to e‑file yourselves (becoming an IRS e‑file provider / transmitter stack) or integrate with an existing transmitter?Which tax year(s) will your MVP support first (e.g., current year + prior year), and will you support federal-only at launch?If you answer those, I’ll turn this into a tighter “PRD + conversation scripts + data schema + rule tables + launch checklist” package optimized for your exact go-to-market.

Terms & Conditions

Last Updated: [Insert Date]

By purchasing, accessing, or using this product, you agree to the following Terms & Conditions. If you do not agree, do not purchase or use this product.

1. Nature of the Product

This product is a software-based, AI-assisted tax preparation and organization tool designed to help users input, organize, and prepare tax-related information.

This product:

• Does not provide legal, tax, or financial advice
• Is not a substitute for a licensed CPA, EA, or tax attorney
• Is intended for educational and convenience purposes only

2. No Professional Relationship

Use of this product does not create a CPA-client, attorney-client, fiduciary, or advisory relationship between you and the product creator.

You acknowledge that no professional advice is being provided.

3. AI & Automation Disclosure

This product uses artificial intelligence and automated systems to process user-submitted information.

You understand and agree that:

• AI systems may produce errors, omissions, or misinterpretations
• Outputs are based solely on the data you provide
• AI results must be reviewed by you before filing

Final responsibility for accuracy rests entirely with the user.

4. User Responsibilities

You agree that you are solely responsible for:

• Providing complete, accurate, and truthful information
• Reviewing all outputs, calculations, and tax forms
• Ensuring compliance with federal, state, and local tax laws
• Filing your tax return and making payments on time

You acknowledge that tax laws vary by jurisdiction and individual circumstance.

5. Filing, Acceptance & IRS Disclaimer

We do not guarantee:

• IRS or state acceptance of any return
• Accuracy of final tax outcomes
• Eligibility for deductions, credits, or refunds

We are not responsible for:

• IRS or state audits
• Penalties, interest, or additional taxes assessed
• Delays, rejections, or corrections required after filing

6. Documentation & Verification

We do not verify the authenticity, completeness, or legality of any documents uploaded, including but not limited to:

• W-2s
• 1099s
• Receipts
• Expense records
• Income statements

All outputs rely entirely on user-submitted data.

7. Limitation of Liability

To the maximum extent permitted by law:

• We shall not be liable for any direct, indirect, incidental, consequential, or punitive damages
• Total liability shall not exceed the amount paid for this product

By using this product, you agree to hold harmless and indemnify the creator from any claims, losses, or damages arising from its use.

8. No Audit or Representation Services

This product does not include:

• IRS or state audit support
• Representation before tax authorities
• Amended return preparation
• Legal defense or correspondence

9. Refund Policy

Due to the digital nature of this product and immediate access upon purchase, all sales are final unless otherwise stated.

No refunds will be issued once the product has been accessed or used.

10. Intellectual Property

All content, software logic, workflows, prompts, templates, and materials are the intellectual property of the product creator.

You may not:

• Resell
• Redistribute
• Copy
• License
• Share access with third parties

11. Access & Availability

We reserve the right to:

• Modify or discontinue features
• Update content
• Suspend access for misuse or violation of these terms

Access is provided “as is” without guarantees of uptime or availability.

12. Privacy & Data Handling

User data is processed solely to provide the functionality of the product.

We do not guarantee absolute security and are not liable for data breaches beyond reasonable control.

Users are responsible for safeguarding their own personal and financial information.

13. Governing Law

These Terms & Conditions shall be governed by and interpreted under the laws of the United States, without regard to conflict of law principles.

14. Acceptance of Terms

By purchasing or using this product, you confirm that:

• You have read and understood these Terms
• You accept full responsibility for your tax filings
• You agree to be bound by these Terms & Conditions

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