In 2011, the Internal Revenue Service (IRS) has established new filing guidelines for tax attorneys and other qualified tax preparers. Most notably, tax professionals are now required to file electronic copies of federal income tax returns prepared for individuals, trusts, and estates.
The new e-filing requirements are expected to be implemented gradually over the next two years. Starting earlier this year, in January 2011, tax attorneys and other preparers who anticipate filing 100 or more tax returns during the year will have to file electronically. These guidelines apply to forms 1040, 1040A, 1040EZ, and 1041. Similarly, starting in 2012, any tax professional who anticipates filing 11 or more of these special tax return forms, must begin filing electronically.
These revised guidelines require company members to calculate in aggregate the total amount of tax returns they expect to file for the year. If the total number of expected tax returns is 100 or more, then each member of the company must electronically file each return they prepare. Every member of the corporation must comply with these guidelines, even if certain individual taxpayers expect to file less than the threshold. Likewise, clients may choose to file independently on paper, but all taxpayers must file electronically.
How to Register as an E-Filing Provider
All taxpayers must be authorized to use the IRS e-filing service. The authorization process can take more than 45 days, so taxpayers must apply early to qualify when compliance is required.
Applicants for the IRS e-services will need to provide personal information, including their legal name and social security number. Also required is the applicant’s adjusted gross income for the current or previous tax year. Every principal and responsible officer in the company must register for the electronic service before the company can legally apply electronically.
After submitting their application and all the required documentation, companies must undergo a conformity check. Checks are carried out on the company as a whole, as well as any person registered on the application as the principal or responsible official. These checks can include a number of processes, including credit checks, tax compliance investigations, and criminal background checks. The IRS also typically looks for previous non-compliance issues with respect to IRS e-filing requirements.
If, for any reason, the company is unable to meet the IRS e-filing requirements, it is possible to apply for a difficulty waiver. By submitting the IRS Form 8944, Difficulty Waiver Request e-file Prepare, companies can apply for exemptions to e-filing requirements. However, notification of approval or disapproval will not be made until all final rules and revenue procedures have been processed.