Mandatory E-Filing

[Lion EA]

I tried searching on my favorite boards and the IRS site. Does anyone have a link to a short and sweet announcement re mandatory e-filing for the next tax season? I have a couple of clients I haven't been able to convert yet, and want to give them a one-pager to get them considering e-filing ahead of the implementation. I thought the IRS had one of their Quick Alerts or Tax Tips or whatever they call those short topics. Thanks for any leads.

[Jack from Ohio]

1) Information is accurate and secure when sent electronic.

2) Acknowlegdement of receipt of the return in less than 48 hours.

3) Processing time is much faster.

4) Most cases, nothing to mail.

5) Refunds in days instead of weeks.

Sell your recomendations as those of a professional.

FYI, those of us doing more than 250 returns have been under mandatory e-filing for a few years now.

[Lion EA]

I e-file almost everyone, but have a couple of hold-outs. Thanks for the help.

[jainen]

>>a couple of clients<<

Come on, the debate is over. Electronic filing is vastly superior on so many levels, including taxpayer protections. Tell them that you now electronically file all returns as required by law. All preparers are subject to the same law, so if the client doesn't like it he can either find someone with a minimal sideline practice or he can do it himself.

Or just tell them you have to charge $100 extra for special hand processing.

[JohnH]

I'm telling them we will have to efling next year, provided I'm still doing tax work at that time.

I also tell them that if there's an opt-out provided, I'll be sending them the form as soon as it's ready.

[Lion EA]

I have no intention of pushing an opt-out if available. I may just tell them e-file is all I do (it is all I want to do and might be all that is legal to do) and let them return to do-it-yourself in one case. The other case has never done it herself, and was sent to me by our mutual broker who sends me most of my new clients; so I don't want to lose the broker recommendations. Or, add the $100 or more paper fee, which might make them leave, also. However, money is not a problem for either of my holdouts. And, even though an extra fee received would make it less painful for me, it might not make it legal if there is no opt-out. The ones that would return to DIY are a bank president who has seen what can go wrong and will not e-file nor DD (he's the one who calls in his own payroll, and he uses only his own bank's accounts and credit cards so he can track transactions with a phone call to his contacts and never has to go online) and his wife who's a real worrier, an older couple. The other holdout is an elderly widow. I might convert her if I take the plunge and start e-filing trusts, since she has two trusts as well as her personal return. CT has some bizarre system that is totally unlike how they receive personal returns, so I just haven't taken the time but should this off-season to get ready.

[michaelmars]

"Come on, the debate is over. Electronic filing is vastly superior on so many levels, including taxpayer protections. Tell them that you now electronically file all returns as required by law. All preparers are subject to the same law, so if the client doesn't like it he can either find someone with a minimal sideline practice or he can do it himself"

i was a long time hold out but fell under the NYS mandated efile. I don't think its simpler for the preparer-you need to discuss the option with client and then they have to decide electronic payments vs paper checks, of course many say it depends if they owe or refund so you have to contact clients 2x. then you have to send a draft which i mostle pdf, then password protect then email with theauthorization forms or send the actual return with the authorization forms, you need to keep a log of each step too. then if it doesn't go through you have to play with the return or send paper copies with opt-out forms [NYS] to the client. you also have to keep checking for efile tranmissions and acceptances for your log.

used to be you do a return, print it mail it and wait for a check.

Then of course there are the NYC entity returns which ATX does not efile so i am sending them copies of efiled federal and state put paper NYC corp returns to paper file. This just confuses soo many taxpayer.

I will say that by the second or third year, once you know the clients preferences then it does make things easier. but in the first years the only one benefiting are the administrative staff for less collating.

all the firms i know are charging efiling fees since its mandated here in ny and adds so much to the task of preparing a return. I get $25-50 depending on the client.

To support Jainan, i have heard some clients like efile so much they are adding fees to clients that want to paper file instead of those that want to efile.

[Lion EA]

Well, since I AM the administrative staff, I do prefer e-filing to lighten my load and let me get to preparing the next return faster.

[kcjenkins]

http://www.webcpa.com/ato_issues/2009_14/-51247-1.html

Here is a link to the current ETAAC report:

http://www.irs.gov/pub/irs-pdf/p3415.pdf

[TAXBILLY]

>>Come on, the debate is over. Electronic filing is vastly superior on so many levels, including taxpayer protections. Tell them that you now electronically file all returns as required by law. All preparers are subject to the same law, so if the client doesn't like it he can either find someone with a minimal sideline practice or he can do it himself.<<

Could someone give me a cite on this "law"? I'ld hate to find out it isn't a law yet and screw up my EA ethics by lying to my clients.

taxbilly

[kcjenkins]

You are right, Bill. It's not law yet, although it probably will be.

[Lion EA]

Helpful links, KC. I'm grabbing a couple of the paragraphs. Need to give a couple clients something in writing to open a conversation, let them air their objections, start them thinking this year. Then I'll follow up after tax season.

[Pacun]

My partner is not that bright. If I didn't efile, I bet you I would get federal retuns on State envelopes, missing w2s, two copies of the same w-2 sent to federal while missing a w-2, 1040 missing signatures, federal payments made out to state, etc. I am so happy that efiling is saving me.

[Don in Upstate NY]

You are right, Bill. It's not law yet, although it probably will be.

I'm not so sure of that. Look at The Worker, Homeownership, and Business Assistance Act of 2009, Public Law 111-92, (HR 3578), Section 17, entitled CERTAIN TAX RETURN PREPARERS REQUIRED TO FILE RETURNS ELECTRONICALLY.

I find it a little ironic that the same law which mandates e-filing also put into effect the latest First Time Homebuyers program, which the IRS has determined cannot be e-filed. :dunno:

[Evan S. Golar]

I e-file - and have for the past 4 years.

However, the one objection I have to it, and it seems to completely be overlooked by practitioners - is that we are now shouldering the administrative burden of FILING the return instead of merely preparing it based on our professional knowledge - which was the accountants' original purpose.

It also relieves the government of human resources of administrative cost for having to pay for the labor of inputting the data. BUT - IRS and state governments - instead of laying people off to SAVE taxpayers money - keep them on staff to perform other duties.

[Mike D]

Does anyony have a client letter explaining mandatory efile? If so would you be good enough to share or send to me?

Thanks

Mike Dubin CPA

[Randall]

Is this just for 1040s? I've been efiling most of my 1040s for several years now, but the 1120S and 1065s, I've held up on because KY has come on board with the piggyback system (or at least ATX) yet.

[jainen]

>>one objection I have to it<<

In my opinion, both these facts make better arguments FOR e-file than against it. To know that the return was actually filed and accepted exactly the way I prepared it is )something I would put a lot of effort into--except that it takes even less effort than assembling a paper return! (Assuming, of course, that one is not also opposed to electronic preparation.)

As to freeing the IRS from unnecessary, redundant data entry so it can efficiently address other responsibilities, I like that idea too.

I suggest you take a page from every salesman's handbook--the assumption close. Don't make a big deal about this with special letters or different options. Treat it as a done deal (which it is anyway), and just assume that everyone agrees or at least accepts the rules we live by. When California went mandatory years ago, we expected all kinds of resistance but were surprised that almost everybody either just shrugged or openly encouraged the change. Within a week we realized that we could simply refuse as clients anybody who demanded special handling, so that first year we had 100% efile (except MFS in this community property state) and lost nobody.

[JohnH]

And now, the ultimate excuse for not e-filing...

E_File_Excuse.pdf

[Catherine]

And now, the ultimate excuse for not e-filing...

Love it!!

[GeneInAlabama]

John, maybe we can take up a collection so that you can pay your electric bill, then maybe you can start e-filing.

[JohnH]

Wouldn't work - I'd find some other excuse.

But thanks for thinking of me just the same...