The Internal Revenue Service has reversed course on its prohibition against stockpiling tax returns before transmitting, and said Friday that because of the late tax law changes, the stockpiling rule does not apply.

In an email to tax professionals, the IRS noted that due to the recent tax law changes in the American Taxpayer Relief Act, tax season was delayed until January 30 (see IRS Delays Tax Season until End of January). In addition, a list of about 30 tax forms will not be accepted, either electronically or on paper, until even later in tax season, perhaps not until late February or March, including Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit).

As a result the IRS said that electronic return originators and online providers are allowed to hold tax returns containing one or more of these forms until the IRS can accept them. EROs and online providers must advise taxpayers that the returns will not be e-filed until the IRS can accept the returns beginning January 30, the IRS emphasized. “Clearly explain to the taxpayer that this means the period for processing the return and/or checking the taxpayer's refund status cannot begin before January 31, 2013.”

Therefore, the e-file stockpiling rule does not apply in this situation.

Normally, an ERO must ensure that stockpiling of returns does not occur at its offices. Stockpiling is collecting returns from taxpayers or from another Authorized IRS e-file Provider prior to official acceptance in IRS e-file; or after official acceptance to participate in IRS e-file, stockpiling refers to waiting more than three calendar days to submit the return to the IRS once the ERO has all the necessary information for origination.

The IRS said it does not consider returns held prior to the date that it accepts transmission of electronic returns to be stockpiled. This includes when the IRS is not able to accept specific returns, forms or schedules until a date later than the start-up of IRS e-file due to constraints such as late legislation, programming issues, etc. EROs must advise taxpayers that it cannot transmit returns to the IRS until the date the IRS accepts transmission of electronic returns.

For more details on stockpiling, see Publication 1345, "Authorized IRS e-file Providers e-filing Individual Income Tax Returns."

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