CPA Group Expresses General Support for Proposed Regs on E-Filing Requirements, Seeks Some Changes

Dear Sir/Madam:

On behalf of the National Conference of CPA Practitioners, I am writing to express our support for the proposed changes in the regulations regarding mandatory e-fling of Federal Income Tax Returns for Individuals, Estates & Trusts.

As the Internal Revenue Service continues its move towards a more modern, technologically up-to-date organization, we believe that this change will be for the better. We also appreciate that the creation of Form 8948, "Preparer Explanation for Not Filing Electronically", for those preparers who either do not have the ability to e-file, or have clients who refuse to have their tax returns submitted electronically.

In addition, the creation of Form 8944, "Preparer e-file Hardship Waiver Request", allows those tax return preparers for whom e-filing would be a hardship.

One of the problems with e-filing, as the IRS may be aware, is that it places an additional burden on the tax return preparer. The preparer MUST have a SIGNED Form 8879 from the taxpayer in their possession before they can, by law, submit a tax return electronically. The need for the signed form forces the preparer to take time from other time sensitive work to contact the client and remind them to return the so that their tax return can be timely e-filed. Many preparers feel that this imposes a significant burden on them, and we at NCCPAP have been looking into this matter to make suggestions to relive the preparer burden in this area.

Electronic filing of tax returns has been around for over twenty years, and in that time it has been the individual states that have embraced e-filing, requiring tax return preparers to submit client returns electronically if they prepare over a certain number of returns, and over the years have lowered the requirement threshold. The Internal Revenue Service had originally proposed that, starting in 2011, preparers would be required to filed if they prepared more than 10 personal income tax returns, without any option for the taxpayer to opt-out of the requirement that their preparer was subject to the mandate. The States have always had the opt-out option for the taxpayer until 2011 when New York, for one, has eliminated the taxpayer opt-out because too many preparers had all of their clients opt-out. We are glad to see that (1) there is a federal opt-out provision, and (2) a phase-in of the requirement for e-filing.

Since most, if not all of our organization's members are already providing e-filing for their clients, we are in agreement with the proposed changes.

We request that the IRS begin to study to determine if there is another way to obtain the taxpayer's consent without the need for a wet-signed Form 8879 in order to reduce the burdens on the tax preparer community.