The Internal Revenue Service warned electronic filing providers Wednesday that they must not submit tax returns electronically before receiving all Forms W-2, W-2G and 1099-R from taxpayers.
In an email alert to tax professionals, the IRS said that if taxpayers are unable to secure and provide a correct Form W-2, W-2G, or 1099-R, e-file providers may submit the electronic return only after securing Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Insurance Contracts, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs etc. in accordance with the use of that form. “This is the only time Providers should submit an electronic return with information from pay stubs or Leave and Earning Statements (LES),” the IRS added.
The IRS noted that it monitors Authorized IRS e-file Providers for compliance with this and other IRS e-file rules and requirements. The IRS warned electronic filers that it may also conduct monitoring visits to ensure compliance with Revenue Procedure 2007-40 and with IRS e-file rules and requirements included in IRS e-file publications.
“The IRS may warn or sanction Providers that violate IRS e-file rules and requirements,” the IRS cautioned. “Sanctions may be a written reprimand, suspension of one to two years or expulsion from participation from IRS e-file depending on the seriousness of the infraction. Providers may appeal sanctions through the Administrative Review Process. Additional information regarding sanctioning is available at IRS.gov in Publication 3112, IRS e-file Application and Participation.”
The IRS announced Tuesday that it was delaying the start of tax season until Jan. 30 because of the last-minute fiscal cliff legislation, and noted that some tax returns with certain cannot be filed until late February or March (see IRS Delays Tax Season until End of January).
8 Comments
Both sides of this argument are correct. Jackson Hewitt and H&R Block and Liberty Tax advertise to bring in the paystub, and IMPLY (but do not explicitly state) that they can file that way. VERY carefully written to tell the truth (but not all of the truth), and VERY easy to be misunderstood by the general public - which, of course, is they are counting on. Is it legal? Yes. Is it ethical? In my opinion, definitely NOT - but who is going to apply the Circular 230 ethics requirements to the big guys? Apparently not IRS.
Posted by: olivertax | January 16, 2013 10:54 AM
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I think all the chain preparers make promises they can't keep. I saw an H&R Block Commercial saying they will get you every deduction possible. Are they saying all their preparers are that good? If a CPA advertised that way they would probably be violating ethic codes. I have friends who worked for Liberty Tax and they got paid almost minimum wage and made their money selling RAL's and other gimmicks.
Posted by: SCOTTCCOYLE | January 15, 2013 8:00 AM
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Jackson HEWITT and H AND R BOTH HAVE COMMERCIALS OUT ON TV SAYING THEY CAN FILE YOUR TAX RETURN WITHOUT YOUR W-2 . WHY DOESN'T THE IRS STOP MAKING THEM RUN THOSE COMMERCIALS...
Posted by: DDTS | January 14, 2013 11:18 PM
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There is a commercial stating that HR Block will do your tax return based on last paystub...I dont think the comment was that stupid..and other tax chains
Posted by: emoton | January 11, 2013 9:46 AM
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H&R Block tax preparers do not file tax returns using paycheck stubs until the taxpayer meets the requirements for a substitute W-2.
H&R Block has a financial product available through H&R Block Bank for individuals who apply for a line of credit using their estimated income for the year. The estimated income is calculated using the applicant's relevant income documents, which can include a paycheck stub. The line of credit can be paid with the applicant's income tax refund when the tax return is filed, if the applicant chooses to do so. A tax return is not part of the equation.
H&R Block has not had a refund anticipation loan product for several years. It does have a product that allows the taxpayer to have their fees deducted from the client's state or federal refund. This product is not a loan.
Posted by: txmngr | January 11, 2013 5:21 AM
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Problem, all the T/Ps who come in later waving a W-2 or 1099, or both, and saying I just received/found these. The only guaranteed way to prevent this is to file an extension and check the IRS website in August.
And if we're just talking of a preparer using the last pay check stub, the the preparer is the idiot/a**hole and should be nailed..
To rmk122: In regards to your comment "Please check your facts before you make stupid comments", what do their ads read? Do the say we will only estimate but not file? And how can they prior to any 1099's and other necessary info presented? You might try clarifying before you make yourself the stupid one.
Posted by: tego@verizon.net | January 10, 2013 2:17 PM
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H&R Block does not complete tax returns without W2s. The last pay stub is to give taxpayers an idea of where they stand in regard to their tax liability. Please check your facts before you make stupid comments.
Posted by: rmk122 | January 10, 2013 1:36 PM
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Does this mean it will sanction H & R Block, Jackson Hewett and Liberty for promoting their bring in your last pay stub and we'll prepare your tax return before you receive your W2 ad campaigns just so these companies can provide the RAL product to customers?
Posted by: centuryea | January 10, 2013 8:12 AM
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