E-filing mandate

[Bees Knees]

It's much more satisfying to be a sour old grouch dragged kicking and screaming into the new-fangled 21st century.

Still, these things usually get worse........

I'll give you some ammunition to be grumpy about. Right after the new law was passed that mandates e-filing, IRS just announced that First Time Homebuyer Credit claims will not be allowed on an e-filed return. You have to file a paper return for those.

IRS wants us to e-file…then they say they can’t handle it. Go figure.

[Black Bart]

Awwww...

Hey, Bart, you only have to enter four (?) characters in a field for e-filing, and they can be almost any characters. I use UNKNOWN when I can't read a W-2 address or am pressed for time. My software fills in UNKNOWN automatically when I type U. The software fills in the client info even for new clients by the time I'm on the W-2s, and 1099s. And, the software fills in the FICA and MM tax fields. So, I only have to watch the EINs. And, when employers repeat, the software recognizes them. Still takes much less time than waiting for another copy to roll off the printer and assembling it and making sure I have the correct envelope and stapling the W-2s on and flagging the signature line and....

(erchess) I find e-filing personally convenient...

(S T) I also like e-file as it makes it easier for everyone...

(veritas) I like the e-file option...

the trouble with all you guys is you're just too cheerful, reasonable, and understanding. It's much more satisfying to be a sour old grouch dragged kicking and screaming into the new-fangled 21st century.

Still, these things usually get worse........

[taxxcpa]

E-filing

For several years the IRS would sometimes reject an e-filed return for no valid reason. This no longer seems to happen, so, finally, I began e-filing almost all returns last year.
Almost all of my returns are repeat clients, so I don't have to fill in most of the W-2 information that is required for a new client or for an existing client with a new employer.

However, if I had a lot of drop-in non-repeat business, I would not like to be forced to e-file unless I charged extra for e-filing. It is only easier in the years after entering all the data.

Also, with new clients there is some risk of incorrect SSNs or other such information which would cause rejects.

Despite the drawbacks, I now prefer to e-file. It cuts out printing the IRS copy of the return and preparing envelopes or looking up mailing addresses. In some cases, I don't even print a paper copy at all, and send the client a PDF and keep a pdf for my file.

[Lion]

Bb

Hey, Bart, you only have to enter four (?) characters in a field for e-filing, and they can be almost any characters. I use UNKNOWN when I can't read a W-2 address or am pressed for time. My software fills in UNKNOWN automatically when I type U. The software fills in the client info even for new clients by the time I'm on the W-2s, and 1099s. And, the software fills in the FICA and MM tax fields. So, I only have to watch the EINs. And, when employers repeat, the software recognizes them. Still takes much less time than waiting for another copy to roll off the printer and assembling it and making sure I have the correct envelope and stapling the W-2s on and flagging the signature line and....

[jimmcg]

While in NC last week I had dinner with a distinguished and knowledgeable CPA friend. He told me he does not do electronic filing for his clients and is considering getting out of the tax business if it becomes necessary next year.

This is not someone who is computer-ignorant, or someone too backward to learn. On the contrary, an amazingly sharp guy. He has other sources of income, and I would think his refusal is based on a fear of electronic proliferation of client data, or electronic storage of bank account numbers and related information.

If his clientele is not allowed to opt out, our profession (and the IRS) will lose someone of value who produces complicated returns virtually error-free. (He does use software, just no e-file).

Tax return preparation is not a large part of my tax consulting business nor is it the most profitable part. If it comes to mandatory e filing I would simply opt out of the additional administrative burden and devote my time to the more profitable areas of tax planning and representation. Simply put it would be an economic decision based on my available business time vs. which time endeavors are more profitable.

[DonPriebe]

Maybe part of the IRS definition of "error" is that it gets noticed only after IRS acceptance or receipt in the mail?

I am a volunteer in the AARP/TCE program. Every year we get feedback from the IRS on how well each of our sites did - number of returns filed, percentage e-filed, percentage of errors, etc. The errors that the IRS counts for these statistics are the number of e-file rejects -- which may or may not be actual errors. Better QC at the preparation site can reduce the typo errors (wrong SSN, EIN, etc.), but these are easily fixed and resubmitted from the copies of the documents that we hold until acceptance, and never hit the IRS mainframe anyway, so cause no harm to the IRS processing. The other type of 'errors' (conflicts with previously filed returns) cannot be fixed and resubmitted and may not actually be errors in our returns. And real errors like missing W2s and 1099s do not cause rejects and so are never counted.

error (n) - a somewhat meaningless term that's easy to count and used in statistical reports.

[erchess]

Definition of Error

I know that the reason the IRS likes e-filing is that it "reduces errors". Correct me if I'm wrong but I assume that "reduces" is being used in the everyday sense of the word.. Is there some tax specific definition of "errors"?

I find e-filing personally convenient and rightly or wrongly I think client data is safer this way than with paper filing. But the only "errors" in which I understand how there could be a reduction are the ones coming from people keying in paper returns. I can see why some errors the preparer (taxpayer volunteer or professional) makes get caught and corrected faster but I don't see why there would be fewer of them unless you just don't count the ones that lead to rejection of the return. That strikes me as perverse but then we are dealing with the government here,

Maybe part of the IRS definition of "error" is that it gets noticed only after IRS acceptance or receipt in the mail?

[S T]

Efile

I also like e-file as it makes it easier for everyone and a whole lot less paperwork, but still have some clients that don't like it - so all we need is an opt out form? E-file Takes a little time to gather those 8879 - but does make the client act on immediately, if they want their refunds, and NO I don't offer RALS! paper returns take a week or two longer.

I don't like the mandate of efiling - but Calif put mandatory efile in place several years ago, and I have opted out of a lot of efiles returns for one reason or the other. - So far no problem - so I would guess other States and Federal would be the same.

I don't see it as a major concern for 2010 or 2011 - all of the government agencies have enough else on "their plates" to deal with.

And I do believe, we as tax professionals have more to deal with, such as worrying about the penalty assessments and compliance, then efile mandates.

Sandy

[veritas]

I personally

like the e-file option but with that being said I don't like mandates from on high.

I guess some software can make the process easier. Drake has a nice feature that pulls up data for employers after typing in the Federal id number. Lacerte added that feature a few years ago.

[Black Bart]

Exactly right.

The one concept that seems to be overlooked in all this hulabaloo about e-filing - is that the government is continually shifting the filing burden from itself to tax preparers. So we now have the administrative responsibility of FILING a client's returns in addition to merely PREPARING them...

Everybody to their own taste I guess and we efile about a hundred returns a year, but I just hate 'em. Every stinkin' thing on the W-2/1099 has to be entered -- while with paper the names, addresses, ID, etc. can be omitted; just punch in 3-4 figures and that's it. Too, when I hand paper to the guy, he (not me) sends it off -- I'm through with it and no babysitting required. No worries about: getting 8879s signed and back here, or getting them to the office before Wednesday noon, or catching the drain, or did it go okay, or is it accepted/rejected? No kickbacks to analyze or IRS/client calls to make or figure out how to make it fly.

Yeah, I know I can roll stuff over, but there's nothing to roll for new cients. A minor concern you might say, but a time-consuming one that I can't really charge enough to make up for. (Actually IRS says that, don't they? That you can't charge any more for efile than paper?). And of course we'll suck it up, get used to it, and forget the extra work.

Oh well, no use beating a dead horse -- the handwriting's on the wall; Nashville's knowledgeable CPA will just have to go ahead and quit and I've got to like it or lump it.

Just once, I'd like to see IRS do something for us rather than continually tightening the screws and hatching things like that psychological profile (B Hoffman posted the link in that recent thread: "Your Tax Dollars at Work") of tax preparers which was presented at their conference and concluded that preparers are ethical bums.

[Uncle Sam]

E-Filing Mandate

The one concept that seems to be overlooked in all this hulabaloo about e-filing - is that the government is continually shifting the filing burden from itself to tax preparers.
So we now have the administrative responsibility of FILING a client's returns in addition to merely PREPARING them.
I full well understand the cyberspace age of computerization and electronic transmission of data being more efficient, bla bla bla, but understand that the accounting/tax profession was knowledge based on knowledge, advice and skills - now we're burdened with clerical duties that are an administrative nightmare - but so long as it's off the government's back - why should they care what problems we've got?

[fliszt]

I file

100% of my clients by efile. I too charge $25 extra for a paper return plus the MN penalty for a paper return of $5. But there has only been 1 client that choose the paper option in the past. (can't remember when). Also, I don't offer bank products since efile is so very fast. Some of the young clients want that "instant" refund but I show them how a refund in 10-15 days is so economical. I'm in business to help the clients, not the banks.
Larry

[DMICPA]

E-Filing

There is nothing wrong with e-filing but it does not fit the needs of every client. Some clients do not want to e-file. Some returns make more sense when there are schedules attached and even a broker statement or two. I know you can send them in under separate cover but I prefer to have the return submitted as complete as possible.

California has an opt out form that the client signs and does not have to give a reason. This form sits at the preparers office and never gets filed with the State.

Some returns, e filing is great, some not. We should be the ones deciding, not the government.

[erchess]

Personally

I like e-filing so much that I charge extra for paper filing returns that are eligible for e-filing. If the taxpayer is allowed to opt out of e-filing little will change for me other than the fact that I suppose I will have to in some way document the taxpayer's decision. It's not fun to get a rejection but both the client and I are happier if I can fix things without changing the bottom line or slowing the receipt of any refund.

[tilt53]

[QUOTE=Bees Knees;89723]Unless the client says no, then the preparer is forced to e-file.QUOTE]

I think (hope) it's going to be easier than that. There are the returns that are rejected and forced into paper. CA provides a form for opt-out by either client or preparer. On the few that won't go through, all I put is, "Unable to e-file." I've never had it questioned.