IRS Phases in the 2011 Federal E-File Mandate

The Worker, Homeownership, and Business Assistance Act of 2009 included a provision that requires tax preparers, beginning for the tax season in 2011, who expect to file more than 10 individual, estate, or trust returns to file them electronically.  However, the IRS on its website has announced that it has decided to phase in the e-file mandate over 2011 and 2012.

As a result, the e-file mandate is as follows:

2011
– Return preparers who reasonably anticipate filing 100 or more tax returns in 2011 are required to file them electronically.

2012 – Return preparers who reasonably anticipate filing 10 or more tax returns in 2012 are required to file them electronically.

Delaying the full implementation for one year will allow the IRS and small practitioners time to adapt to the new requirement.

Many states already have mandatory e-file requirements, and this new federal requirement may or may not have an impact on practitioners in those states where mandatory e-filing is already required.

For example, California requires e-filing where a practitioner prepares more than 100 individual state income tax returns annually and prepares one or more using tax preparation software.  Thus, for 2011, the new federal requirement will generally have no impact on California tax practitioners.  However, in 2012, it will impact those who are currently exempt because they prepare fewer than 100 returns, since the federal requirement will drop to 10 or more returns.  Also note that the federal requirement includes individual, estate, and trust returns in the count where California only considers the number of individual returns.

  • Lee Reams Sr.

  • Lee T. Reams is the Chief Technical Officer of ClientWhys. He is also an Enrolled Agent having managed a 600-plus client tax practice. Educated as an engineer, with a Bachelor's Degree in Mechanical Engineering, Lee left his engineering career in 1975 to expand his part-time tax practice into a full-time career.

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