E-file Mandates
• Partnerships with more than 100 partners.
• Corporations with assets of $50 million or more, and file 250 or more returns per year.
• Tax exempt organizations with total assets of $100 million or more.
• The following states have some type of mandate for tax professionals: AL, CA, CT, MA, MI, MN, NJ, NY, OK, RI (legislation pending) UT, VA and WI.
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The IRS has ended its Tele-File program
The tele-file program, which allowed taxpayers to file certain forms by telephone, has been discontinued as of August 16, 2005. Reasons for eliminating the program included a decline in use of the system, increasing costs to maintain the system and growth of other electronic filing options.
- Six-Month Automatic Extension
Beginning January 1, 2006, most individuals and businesses will be able to request a full six-month tax filing extension using Form 4868 without providing a reason or a signature.
- Monitoring of Authorized IRS e-file Providers
Beginning January 1, 2005 all suspensions from participation in the IRS e-file program will be for either one or two years based on the level of infraction, from the effective date of the suspension, instead of for the remainder of the current year plus either one or two years. Suspended Providers will be able to reapply 45 days prior to the final date of the suspension period to allow for IRS processing.
- Disclosure for RAL’s and Other Financial Products
Authorized IRS e-file Providers that assist taxpayers in applying for a RAL or other financial products have additional responsibilities and may be sanctioned by the IRS if they fail to adhere to the following requirements:
- Ensure taxpayers understand that by agreeing to a RAL or other financial product, they will not receive their refund from the IRS and the IRS will send their refund to a financial institution.
- Advise taxpayers that RALs are interest bearing loans and not a quicker way of receiving their refunds from the IRS.
- Advise taxpayers that if a Direct Deposit is not received within the expected time frame for whatever reason, the taxpayer may be liable to the lender for additional interest and other fees, as applicable for the RAL or other financial product.
- Advise taxpayers of all fees and other known deductions to be paid from their refund. The remaining amount is what the taxpayer will actually receive.
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