The IRS issued final regulations (TD 9518) and several pieces of guidance relating to the requirement that return preparers e-file tax returns, starting this year. The final regulations adopt, with minor amendments, proposed regulations (REG-100194-10) that were published last December, and they require specified tax return preparers to e-file if they reasonably expect to file 100 or more income tax returns in 2011.

The final regulations clarify the definition of “specified tax return preparer,” define the term “file,” allow taxpayers to opt out of having their returns e-filed if they follow prescribed procedures, provide for undue hardship waivers and administrative exemptions, and provide a two-year transition rule. The final regulations are effective upon their publication in the Federal Register.

 

The mandatory e-filing requirement applies to any income tax return for an individual, estate or trust. However, certain returns that the IRS cannot accept electronically are currently exempt from the requirement. These exempt forms include Form 990-T, Exempt Organization Business Income Tax Return; Form 1040-NR, U.S. Nonresident Alien Income Tax Return; Form 1041-QFT, U.S. Income Tax Return for Qualified Funeral Trusts; and all amended individual income tax returns.

The IRS received 53 written comments on the proposed regulations and made amendments to the final regulations based on some of the comments.

 

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