Preparer Electronic Filing Mandate

Congress authorized the IRS to impose an electronic filing mandate on tax return preparers who prepare individual federal returns beginning with the 2011 filing season. The legislation stated that any preparer who prepared over 10 returns is required to file all of the returns they prepare electronically beginning on January 1, 2011.

This new requirement will be phased in over two years as follows:

  • Filing season 2011 – Preparers who anticipate preparing 100 or more federal individual returns are required to file those returns electronically.
  • Filing season 2012 and beyond – Preparers who anticipate preparing 11 or more federal individual returns are required to file those returns electronically.

For helpful IRS FAQs on the mandate click here.

On March 28, 2011 the IRS released final regulations, a final revenue procedure and notices related to this mandate.

Final regulations (TD 9518 – Effective March 30, 2011) include:

To review the final regulations click here.

Final Revenue Procedure 2011-25

which includes:

  • Establishes new Section 6011(e)(3) of the Internal Revenue Code.
  • Return thresholds as noted above.
  • Fact that the return threshold is based on number of returns a preparer expects to file for the upcoming filing season.
  • If preparer works for a tax preparation firm, the threshold is determined at the firm level.
  • Definition of File or Filed.

    To review Revenue Procedure 2011-25 click here.

    Notice 2011-26

    Includes details on when administrative exemptions will be granted for the mandate such as for exempt preparers, members of certain religious groups, foreign preparers without SSNs, rejected returns, etc.
    To review Notice 2011-26 click here.

    Notice 2011-27

    Transitional guidance for calendar year 2011 regarding the mailing of individual income tax returns by preparers.
    To review Notice 2011-27 click here.

    • How the preparer obtains taxpayer acknowledgement of their request to not file their return electronically.
    • Must obtain a signed and dated statement from the taxpayer (and spouse if filing a joint return) that they are choosing not to file their return electronically. The statement must include wording that is similar to that provided in the revenue procedure.
    • The process a preparer must use to request a waiver which includes the filing of Form 8944 (Preparer e-File Hardship Waiver Request).