Worker, Homeownership, and Business Assistance Act of 2009

[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?

[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.

[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.

[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]

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.