Income Tax Preparers Face New E-Filing Requirements

New IRS rules state that tax preparation firms that file over one hundred returns this year will have to file those returns electronically. Next year, that rule will apply to any firm that files over ten returns. The IRS says e-filing will streamline the process and help people get their returns quicker. University of Houston law professor Ira Shepard says electronic returns will also allow the IRS to drill down more deeply into a person's tax records.

"It will enable the IRS to compare this year's return with returns that were previously filed, so they can look for inconsistencies."

The new rules say if someone wants a tax preparer to fill out a paper return, the taxpayer will have to mail the return to the IRS themselves, and sign a document that the preparer will keep on file. CPA Alan Westheimer says with so many cases of information theft online, he feels taxpayers should have the option of using paper.

"I would just like to know that the IRS has the capacity, has the modern software and is able to deal with that much information coming in on a regular basis, can store it appropriately, has adequate safeguards and adequate security."

Tax preparers have the option of filing a hardship request if they can't meet the e-filing requirement. The law also allows several exemptions including those for religious groups that oppose electronic filing.
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