In December, TSCPA’s Federal Tax Policy Committee issued comments to the IRS on REG-100194-10, proposed regulations on the electronic filing mandate for tax return preparers who reasonably expect to file more than 10 individual income tax returns in a calendar year. Last week the IRS released its final regulations. Here are some things that the FTP did and did not receive:
· For married taxpayers who wish to paper file a joint return, the IRS will allow one spouse’s signature to be sufficient on the taxpayer opt out statement. Sample language can be found in Rev Proc 2011-25.
· The IRS did not make changes to allow the preparer or firm to mail a client’s paper return. However, the IRS provided a transition rule for the 2011 calendar year only, for preparer to mail the return under certain circumstances. This includes obtaining a hand-signed and dated statement that the taxpayer not only requests to paper file, but also requests that the preparer mail the return. Sample language can be found in Notice 2011-27.
· The committee asked for a phase-in period or more gradual approach to give preparers with between 11 and 100 returns some time to adapt and to upgrade software, etc. The IRS did not adjust the “more than 10” threshold that starts 2012 and clarified that the lack of a preparer’s proper equipment and technology to meet the requirement does not qualify for a hardship waiver in and of itself.
· The final regulations specify and provide five examples of when a return preparer reasonably expects to fall within the e-filing mandate.
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