A new electronic return filing mandate became effective January 1, 2011 for returns sent out by paid tax return preparers. In November 2009, the President signed legislation to require most tax return preparers to electronically file (e-file) federal income tax returns prepared and filed for individuals, trusts, and estates. That new law had a delayed effective date of January 1, 2011, to give most everyone time to switch over to electronic-only filing. That day has arrived. Beginning January 1, 2011, HLB Gross Collins, P.C. is required to electronically file with the IRS all tax returns prepared by this office for individuals, trusts and estates.
The e-file requirement does not apply to an individual income tax return when a tax return preparer’s client chooses to have the return completed in paper format and the client, and not the preparer, files the paper return with the IRS.
If you chose to file your return on paper under the new rules your tax return preparer will be required to identify the paper returns prepared by completing Form 8948, Preparer Explanation for Not Filing Electronically, and attaching it to the paper return that you will then file with the IRS. The preparer must then request you to sign a statement verifying that you understand the requirements to e-file returns, your election to continue filing a paper form, and your understanding that you must file the paper return yourself and that the preparer cannot file it with the IRS. We do not recommend paper filing based on the advantages provided by electronic filing but we must advise you of this option. Of course, as always, we will provide you with a paper copy of your return for your records.
The e-file requirement technically is phased in over two years, but with most preparers immediately subject to the new rules, under the following schedule:
- January 1, 2011: For preparers who anticipate filing 100 or more Forms 1040, 1040A, 1040EZ and 1041 during the year; and then
- January 1, 2012: For preparers who anticipate filing only 11 or more 1040, 1040A, 1040EZ and 1041 during the year and thereafter.
E-filing is a safe, effective, fast and easy way to file tax returns. It also results in faster refunds. Since the IRS now inputs into its computer system all data received on paper returns, absolutely no advantage remains to paper filing. If you have questions about the new e-filing requirement or how the new rules may affect the handling of your tax return, please contact our office.