Worker, Homeownership, and Business Assistance Act of 2009

[Bees Knees]

I see nothing in the wording in the tax law, or the Joint Committee Technical Explanation that would indicate some sort of opt out for tax return preparers who do not use a computer. I’m not saying the IRS will not have such a provision under regulations, but the language of the bill and technical explanation says nothing to that affect in my opinion.

However, I do believe there will be some sort of federal opt out provision. The law does seem to give the IRS authority to do this sort of thing through regulations. In states such as Minnesota that have mandated e-filing for tax return preparers, there are opt out provisions, particularly when the taxpayer does not want to e-file.

[New York Enrolled Agent]

The new law still has that 250 return mandatory e-filing. However, it no longer exempts mandatory e-filing for individual returns. Thus, the new law requires e-filing by 2011 for tax preparers who do 10 or more individual returns.

Bees

I agree with all your comments on this mandatory e-filing. However, the language in the bill is awkward and not a model of clarity.

I saw the following on a different message board. I would welcome your (and others) thoughts.

[start]From the NSA e-mail on the subject;

The provision applies only to preparers who both prepare and file the returns in question. Preparers who are not yet e-filing returns (primarily those who consider the Internet a fad) can still prepare and sign the return but will need to ask the client to mail the return to the IRS if they do not want to be subject to this e-filing provision. The same for preparers whose clients do not want their return e-filed or who have returns that cannot be e-filed for a variety of reasons. [end]

I think this interpretation is due to the awkward language in the bill (found below) though I do think it is at odds with the intent of the legislation. (3)(A)(i) seems to be the problem. What do you think?


`(3) SPECIAL RULE FOR TAX RETURN PREPARERS-
`(A) IN GENERAL- The Secretary shall require than any individual income tax return prepared by a tax return preparer be filed on magnetic media if--
`(i) such return is filed by such tax return preparer, and
`(ii) such tax return preparer is a specified tax return preparer for the calendar year during which such return is filed.
`(B) SPECIFIED TAX RETURN PREPARER- For purposes of this paragraph, the term `specified tax return preparer' means, with respect to any calendar year, any tax return preparer unless such preparer reasonably expects to file 10 or fewer individual income tax returns during such calendar year.

[Bees Knees]

Now I'm confused!

Which is it -- 10 or 250?

The original law mandated e-filing for 250 returns, with the exception of individual returns. That is why certain corporations that file more than 250 returns are required to e-file. The 250 returns include excise tax, employment tax and information returns such as Forms W-2 and 1099. (TTB page 15-11).

The new law still has that 250 return mandatory e-filing. However, it no longer exempts mandatory e-filing for individual returns. Thus, the new law requires e-filing by 2011 for tax preparers who do 10 or more individual returns.

[JohnH]

I think it used to be 250, but now it's 10. However, there's plenty of time for the development of all sorts of exceptions to the rule before 2011 rolls around.

[Black Bart]

Say, boys...

Anyone notice the new law now mandates e-filing for everyone who does 10 or more returns?

Difficult to understand the requirements if a preparer prepares less than 250 returns. Also 250 returns may be ALL returns, not just 1040s.

Now I'm confused!

Which is it -- 10 or 250?

[Jesse]

I think it is more about saving money than control.

Wisconsin has mandated E-filing for several years also. I think it was for paid preparers of >100 returns, I'm not positive. Sales and Use tax reports are E-file mandated for 2010 also, unless you request a waiver for undue hardship. Again, it is a money saver for the Departments.

[jimmcg]

No hidden agenda as we speak, Bees. But after e-filing becomes mandatory, there will be all manner of hoops to jump through or the return will be electronically rejected. If they tried this at present, client simply files a paper return.

Being able to allow or reject will create a new hierarchy of control that does not currently exist. And, in time, they will use it.

I hope I'm wrong. Time will tell.

Snag you hit the nail right on the head there; it's all about "control." They will get it and we will loose it.

[Snaggletooth]

Hidden Agenda

No hidden agenda as we speak, Bees. But after e-filing becomes mandatory, there will be all manner of hoops to jump through or the return will be electronically rejected. If they tried this at present, client simply files a paper return.

Being able to allow or reject will create a new hierarchy of control that does not currently exist. And, in time, they will use it.

I hope I'm wrong. Time will tell.

[Lion]

It's not me

I like efiling. It's a couple of my clients that I've not been able to convince after years of trying. Hope they develop an opt-out form...

[Bees Knees]

As long as e-file is not required, IRS is willing to remove as many barriers as it can. When e-file becomes mandatory, they will be throwing up barriers to enforce their agenda. Don't think for a minute that IRS is our friend and won't do this.

I'm not sure what you mean by throwing up barriers. They are doing it because Congress passed a law requiring them to do it. I doubt there is a hidden agenda, other than wanting to save money from all the duplicate work involved when someone prepares a return on a computer, prints out the copy, then sends it to the IRS, causing a second person to do the same work all over again entering it into the IRS computers.

It also saves a ton of paper.

[Snaggletooth]

Protocol

Minnesota required us to e-file several years ago. I refused until I was mandated to do so. Now I think it is a good thing.

Try it, you will like it.

I do think once this happens, there will be electronic protocol mandated by the IRS as well and inserted into tax software packages. Without the inclusion of this mandated protocol, the e-file will be rejected, and the originator thus obligated to proliferate compatible information. This really puts the IRS in the drivers' seat as far as what to require of preparers.

As long as e-file is not required, IRS is willing to remove as many barriers as it can. When e-file becomes mandatory, they will be throwing up barriers to enforce their agenda. Don't think for a minute that IRS is our friend and won't do this.

[jimmcg]

Minnesota required us to e-file several years ago. I refused until I was mandated to do so. Now I think it is a good thing.

Try it, you will like it.

Good advice Bees however sunshine and warmer temps in January and February are beginning to sound more inviting each year.

[Bees Knees]

Noticed that. Obviously the tax software developers and providers have a strong lobby group. If that comes to past, and I am not sure it will remain at ten after the dust settles, I personally will consider more retirement time and just stick to the tax representation work on a limited basis.

Minnesota required us to e-file several years ago. I refused until I was mandated to do so. Now I think it is a good thing.

Try it, you will like it.

[jimmcg]

Anyone notice the new law now mandates e-filing for everyone who does 10 or more returns?

Begins in 2011.

Noticed that. Obviously the tax software developers and providers have a strong lobby group. If that comes to past, and I am not sure it will remain at ten after the dust settles, I personally will consider more retirement time and just stick to the tax representation work on a limited basis.

[Snaggletooth]

Yes, but

Difficult to understand the requirements if a preparer prepares less than 250 returns. Also 250 returns may be ALL returns, not just 1040s.

I have some clients who have steadfastly refused electronic filing from the start.