An IRS advisory committee has recommended that the IRS require all tax preparers who file at least 200 returns a year to use electronic filing.

The 2009 annual report from the Electronic Tax Administration Advisory Committee said the requirement was necessary if the IRS hoped to reach the goal of 80 percent of returns being electronically filed.

“ETAAC now believes that a threshold set at 200 returns would achieve significant savings while avoiding the imposition of undue burdens on small preparer offices,” said the report. “Such an e-file threshold would result in approximately 16 million additional Form 1040 returns transmitted via e-file, saving approximately $40 million in IRS manual paper processing costs. It would also push the Form 1040 e-file volume from today’s 69 percent level to approximately 80 percent and move the overall e-file needle from 59 percent to 65 percent.”

The committee said that if legislation enabling the IRS to require tax preparers to e-file were passed by June 2010, the IRS could require e-file to be effective for tax returns that were required to be filed after Dec. 31, 2010, and tax preparers would have enough time to get ready.

At the same time, the committee urged the IRS to provide more electronic self-service tools for preparers.

The report also recommended that the IRS continue modernizing its technology and that the IRS collaborate on software standards with the tax preparation industry and the states to take a standardized national approach on common functions such as authentication, e-signatures, data definitions and data interchange.

The annual report from the 14-member panel goes to Congress every June. Other recommendations in the 2009 report include rebranding e-file by re-evaluating marketing objectives and changing taxpayer demographics. The panel also recommended that the IRS renew the Free File Alliance and make the program easier to understand and use. Panelists also recommended that the IRS ease the requirement for obtaining signed taxpayer consent before information returns can be shared with state tax authorities.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access