U.S. taxpayers chose to e‑file nearly a billion individual income tax returns with the IRS over the last two decades―100 million last year alone.
At the federal level, at least for individuals, e‑filing has remained voluntary.*
That’s now changed.
Building on the momentum for e‑filing, the Worker, Homeownership and Business Assistance Act of 2009 established new rules that require paid tax preparers to e‑file on behalf of their individual, estate and trust clients. The rules also affect certain not-for-profit organizations structured as trusts.
This year, preparers who anticipate filing at least 100 Forms 1040, 1040A, 1040EZ and 1041 must file them electronically. Next year, the rule applies to preparers who file more than 11 of these returns.
Significantly, the new federal e‑file mandate applies to tax preparers and their firms, not their clients. There is no requirement that individuals, estates or trusts e‑file their federal income tax returns. There are, however, specific procedures that must be followed in order to opt out of e‑filing.
According to IRS Commissioner Doug Shulman, the new e-filing requirement “reflects the realities of the modern world where technology has evolved to the point that everyone should be filing their tax returns electronically.”
Impact of the New Rules on Bader Martin and Our Tax Clients
To satisfy the newly mandated procedures for federal e‑filing of individual, estate and trust returns, we’ve adapted our procedures.
If we’re e‑filing your return, we’ll need a signed copy of Form 8879, IRS e‑File Signature Authorization in advance of the filing deadline. We’ll provide you with a copy of the form and your return, by mail or web-based portal, when we complete the return. You can return a signed copy of the form to us by mail, email or fax.
If you’re filing a paper copy, you must actually file the return yourself. We cannot mail your tax return to the IRS on your behalf. Instead, we’ll need a signed statement from you in advance of the filing deadline to ensure that you can mail the paper return by the due date.
According to the IRS, the statement must state that “the taxpayer chooses to file the return in paper format and that the taxpayer, not the preparer, is submitting the paper return to the IRS. Such statement must be signed by the taxpayer (or both spouses if a joint return) and dated on or before the date the taxpayer files the return.” The IRS has developed a sample statement that can be used to satisfy this requirement.
We’ll also need to attach Form 8948, Preparer Explanation for Not Filing Electronically to the return.
These newly mandated federal procedures mean that, together, we must develop a plan to deliver or e‑file your federal tax return―or submit an extension request along with any necessary payment―well in advance of April 15.
Also this year, with limited exceptions, we will e‑file federal and state returns for C corporations, S corporations, partnerships, benefit plans and not‑for‑profit organizations. If you prefer to file a paper return, we’ll honor your request in circumstances where e-filing is not mandatory.