The IRS on Wednesday issued proposed guidance on how return preparers may meet their new electronic filing requirement for individual and fiduciary income tax returns starting Jan. 1, 2011. The proposed regulations (REG-100194-10) and a proposed revenue procedure (Notice 2010-85) provide for a hardship exception to the requirement and specify how preparers may document via a statement signed by the taxpayer that the taxpayer chose to self-file the return on paper rather than have the preparer e-file it. They also clarify how to determine whether a preparer meets the minimum number of returns to be filed in a year for the requirement to apply.
The mandate is imposed by IRC § 6011(e), as amended by the Worker, Homeownership, and Business Assistance Act of 2009, PL 111-92. It provides that a tax preparer who reasonably expects to file more than 10 individual income tax returns in a calendar year must do so by "magnetic media" (generally, through the IRS' e-file computer system). For purposes of the requirement, individual income tax returns include those filed on behalf of estates and trusts. The IRS has provided a transitional rule for calendar 2011 only that increases to 100 the number of returns a preparer must anticipate filing for the requirement to apply.
The proposed regulations specify that for purposes of the requirement, a return is considered filed by a return preparer if it is filed, either directly or indirectly, on paper or electronically, by a member, employee or agent of the preparer or the preparer's firm. In other words, the requirement applies to the aggregate number of returns filed by a firm, whether or not a return is filed by an employee or agent other than the preparer.
rest at http://www.journalofaccountancy.com/Web/20103613.htm
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