Proposed regulations were published this summer that, if finalized, could require additional business returns to be electronically filed as early as this spring. Comments on the proposed regulations requested additional time before the expanded e-file mandate becomes effective, noting challenges for certain filers to comply with the new rules.
Prior to recent legislation, taxpayers were not required to electronically file returns if they were required to file fewer than 250 returns during a calendar year, although a special rule required partnerships with 100 or more partners to electronically file. For corporations with $10 million or more in assets, current regulations require aggregating the number of all return types required to be filed (such as Form 1120, “U.S. Corporation Income Tax Return,” and Form W-2, “Wage and Tax Statement”) when determining whether the filing threshold is met. For most information returns, current regulations provide that the 250-return threshold is determined separately for each type of information return. The IRS has the authority to provide e-file hardship waivers. Penalties may apply if returns required to be electronically filed are not e-filed.