Starting in January 2012, any paid preparer or firm that reasonably anticipates preparing and filing more than 10 Form 1040 series returns, Form 1041 returns, or a combination of Form 1040 series returns and Form 1041 returns, will be required to e-file those returns. The 2012 requirement will mark the second and final phase of implementing a law that was intended to boost the electronic filing rate of income tax returns for individuals, trusts, and estates. In 2011, the e-file mandate pertained to any paid preparer or firm that anticipated preparing and filing 100 or more returns.
If the requirement will cause undue hardship, preparers may seek a one-year waiver by submitting Form 8944, Preparer e-file Hardship Waiver Request. If a client wants to file a paper return, the preparer should include Form 8948, Preparer Explanation for Not Filing Electronically, with the client's tax return. A taxpayer choice statement should be obtained and kept with the preparer’s records. Form 8948 does not have to be submitted with returns that are not currently accepted electronically by the IRS or the IRS has instructed taxpayers not to file them electronically. These returns are exempt from the federal e-file requirement. See the IRS link to e-file mandate FAQ: http://www.irs.gov/taxpros/article/0,,id=231871,00.html.