IRS COMMITTEE RECOMMENDS MANDATORY E-FILING

Washington, D.C.-The 2009 annual report from the Electronic Tax Administration Advisory Committee recommended that the IRS require all tax preparers who file at least 200 returns a year to use electronic filing, if it hopes 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.

IRS UPDATES 1040 FOR 2009

Washington, D.C.-The IRS has posted a preview of the 1040 for 2009, along with the latest rules for e-filing the returns.

The IRS warns that the 1040 posted on its site is only a draft form, or an advance proof copy that is subject to change and approval by the Office of Management and Budget. The draft can be found at www.irs.gov/pub/irs-dft/f1040--dft.pdf. The IRS is also accepting comments on the draft form.

In addition, the IRS has posted updated schemas and business rules for Forms 1040 and 4868, with links to information and technical guidance for software developers and transmitters for the modernized e-file versions of the forms. The page can be found at www.irs.gov/efile/article/0,,id=209615,00.html.

IRS TAX COMPLIANCE EFFORTS SHOW MIXED RESULTS

Washington, D.C.-Despite some decreases in 2008, the IRS's overall level of compliance activities remains higher than in the years immediately after the implementation of the IRS Restructuring and Reform Act of 1998.

A new report by the Treasury Inspector General for Tax Administration found, however, that some IRS collection function activities and results declined during 2008 after several years of improved results. The use of liens continued to increase, but the use of levies and seizures decreased during the year. Enforcement revenue collected also decreased, and the total dollar amount of uncollected liabilities increased.

The overall percentage of tax returns examined decreased by almost 3 percent; however, the overall percentage of tax returns examined was almost 12 percent higher than in 1999.

The number of tax returns of individuals examined increased, with almost 82 percent conducted via correspondence examinations. The number of corporate tax returns examined increased by just over 1 percent, a decline of almost 23 percent since 1999.

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