IRS Offers E-file ‘Hardship Waiver’ for Tax Preparers

The Internal Revenue Service has released a new form that will allow tax preparers to request a hardship waiver to exempt them from the IRS’s new electronic filing requirements.

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 Jan. 1, 2011 for preparers who anticipate filing 100 or more Forms 1040, 1040A, 1040EZ and 1041 during the year; or Jan. 1, 2012 for preparers who anticipate filing 11 or more 1040, 1040A, 1040EZ and 1041 during the year.

Specified tax return preparers may request an undue hardship waiver from the new e-file requirement using Form 8944, Preparer e-file Hardship Waiver Request.

Announcement  2010-96  announces the release of Form 8944, which preparers who believe they may qualify for an undue hardship waiver may begin to use to voluntarily submit an undue hardship waiver request to the IRS now. Preparers must use Form 8944 to voluntarily request a waiver. Reasons can include bankruptcy, economic problems, or living in a Presidentially declared disaster area.

The IRS is encouraging preparers to submit their requests as soon as possible, although approval of the requests will not occur prior to the publication of final regulations and a final revenue procedure, which is expected in early 2011.

For calendar year 2011, Forms 8944 generally must be submitted to the IRS no later than April 1, 2011.