Thursday, February 10, 2011

Many Tax Return Preparers Must Use IRS e-file Beginning in 2011

A new law requires many paid tax return preparers to electronically file federal income tax returns prepared and filed for individuals, trusts, and estates starting Jan. 1, 2011.
The e-file requirement will be phased in over two years. As a result of the new rules, preparers will be required to start using IRS e-file beginning:
  • January 1, 2011— for preparers who anticipate filing 100 or more Forms 1040, 1040A, 1040EZ and 1041 during the year; or
  • January 1, 2012— for preparers who anticipate filing 11 or more 1040, 1040A, 1040EZ and 1041 during the year.
The rules require members of firms to compute the number of returns in the aggregate that they reasonably expect to file as a firm. If that number is 100 or more in calendar year 2011 (11 or more in 2012 and thereafter), then all members of the firm must e-file the returns they prepare and file. This is true even if a member prepares and files fewer than the threshold on an individual basis.
Clients may independently choose to file on paper.

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