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Final Regulations: Electronic-Filing Requirements for Specified Returns and Other Documents

In this article, we will examine the electronic filing requirements for 2023. On Tuesday, February 21, 2023. The IRS released final regulations amending the rules for filing electronically made by the Taxpayer First Act (“TFA”). The regulations for specified returns will be effective as of the date published within the Federal Register. With the date scheduled for February 23, 2023. 

IRS General Takeaways

In the regulations there are some introspective statistics on information returns and some great insight into the steps taken by the IRS when receiving paper-based information returns. The general takeaways are as follows:  

  1. Electronic filing will be required in the 2024 calendar year for financial institutions and any taxpayer with 10 or more information returns to file within that year. 

  2. The threshold calculation will look at information returns in the aggregate but will not include corrected returns. 

  3.  The electronic filing requirement and aggregation rule will also be applicable to Form 1042 reporting. Electronic reporting of the Form 1042 will not be required where the withholding agent is an individual, estate, or trust. 

  4. Electronic filing requirements will be applicable to foreign filers, including Qualified Intermediaries.
    • The IRS is looking to develop “alternative authentication requirements for identify proofing” for foreign filers. 

  5. The IRS will continue to grant hardship waivers and reasonable-cause relief from penalties for failure to file returns electronically in appropriate cases. 

  6. An exemption will be allowed for filers whose religious beliefs conflict with electronic filing. 

  7. For filing corrected returns, if the filer was required to file the original electronically then the correct return must also be filed electronically. 

The link to the final regulations: 2023-03710.pdf (federalregister.gov) 

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Final Regulations Electronic-Filing Requirements for Specified Returns and Other Documents
Final Regulations Electronic-Filing Requirements for Specified Returns and Other Documents

This document contains general information only and is not a substitute for accounting, tax, or any other professional advice or services. The information provided is considered accurate at the time of publishing and will not be updated with new regulation requirements.

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