Politics & Government

IRS Urges: Prepare Now for New e-file Rules

Tax preparers should obtain Electronic Filing Identification Numbers (EIFNs) to meet new e-file requirements

Beginning in January 2012, there will be new e-file requirements, and The Internal Revenue Service is advising all tax professionals and tax firms that do not yet have Electronic Filing Identification Numbers (EFINs) to start the process to obtain EFINs now.

Any paid tax preparer or firm that anticipates filing 11 or more Form 1040 series returns, Form 1041 returns, or a combination of Form 1040 series returns and Form 1041 returns generally must use IRS e-file.

But in order to become an Authorized IRS e-file Providers, preparers must create an e-Services account, submit an EFIN application and pass a suitability check -- an approval process that can take 45 days or more.

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The new 2012 requirement marks the second and final phase of implementing a law intended to increase the number of tax returns filed electronically by individuals, trusts and estates.

Since the nationwide debut of electronic filing in 1990, nearly 80 percent of individual tax returns are now filed electronically.

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In 2011, the e-file mandate pertained to any paid preparer or firm that anticipated preparing and filing 100 or more returns. The e-file rate by paid preparers increased 12 percent in 2011.

Preparers can review the process on IRS.gov at Become an Authorized e-file Provider or find additional guidance at the Frequently Asked Questions section.

If the requirement will cause undue hardship, preparers may seek a one-year waiver by submitting Form 8944, Preparer e-file Hardship Waiver Request. 

Go to www.irs.gov/taxpros for information.


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