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CCH can assist you with stories, including interviews with CCH subject experts. Also, the 2013
CCH Whole Ball of Tax
is available in print. Please contact:
 
Leslie Bonacum
(847) 267-7153
mediahelp@cch.com
 
Eric Scott
(847) 267-2179
eric.scott@wolterskluwer.com
 
Brenda Au
(847) 267-2046
brenda.au@wolterskluwer.com

Visit the CCH Whole Ball of Tax site often as new releases and other updates will be posted
throughout the tax season.

CCH provides special CCH Tax Briefings on key topics at CCHGroup.com/Legislation.

 
2013 CCH Whole Ball of Tax
Release (19) | Back to WBOT

2013 CCH Whole Ball of Tax

Contact:
Leslie Bonacum
, 847-267-7153, mediahelp@cch.com
Eric Scott , 847-267-2179, eric.scott@wolterskluwer.com
Brenda Au , 847-267-2046, brenda.au@wolterskluwer.com

Tips for Tax Preparers: CCH Says Know the Rules Before You File

(RIVERWOODS, ILL., January 2013) – Whether you’ve spent a career preparing tax returns or are new to the profession, all tax preparers must be registered with the IRS and in compliance with current rules and regulations. And in addition to keeping updated on all the changes in federal tax laws, preparers must also stay on top of all recent updates in e-filing mandates that vary greatly from state-to-state, says CCH. CCH, a Wolters Kluwer business and a leading global provider of tax, accounting and audit information, software and services (CCHGroup.com), reviews tips and information that all tax professionals need to know.

PTIN Registration, Renewal

Since January 1, 2011, the IRS has required all paid tax preparers to have a Preparer Tax Identification Number (PTIN) before filing any returns. Preparers are also required to renew their PTINs each year and all registered tax preparers must do so for the upcoming tax season. New PTIN registrations and renewals are available through the IRS web site at www.irs.gov.

Requirements for Different Tax Preparers

There are different levels of tax preparers – each with specific requirements for IRS compliance. CPAs and attorneys who prepare tax returns already fulfill necessary IRS requirements by completing continuing education and compliance standards required by their professions to be in good standing. Other tax preparers must fulfill different requirements, depending on their qualifications.

  • Enrolled Agents – Must pass a comprehensive, three-part IRS exam covering aspects of individual and business tax returns. Enrolled agents also need to complete 72 hours of approved continuing education courses every three years.
  • Registered Tax Return Preparers (RTRP) – Primarily prepare individual tax returns and must pass an IRS competency test covering aspects of Form 1040. RTRPs are also required to complete 15 hours of approved continuing education each year.
  • Supervised Preparers – Are supervised by others when preparing tax returns, but do not sign returns. They usually work for accounting or legal firms and prepare returns under supervision to be signed by CPAs, attorneys and enrolled agents.

Paid tax preparers at all levels must have an IRS-issued PTIN. Supervised Preparers must provide their supervisor’s PTIN when applying for or renewing their PTIN status.

Federal, State E-filing Return Requirements

Filing tax returns electronically has been growing in popularity each year. Nearly 80 percent of all individual federal returns are now e-filed and about 100 million returns were e-filed last year, according to the IRS. Since 2012, tax practitioners or their firms have been required to use IRS e-file when filing ten or more individual or trust returns. Tax practitioners also must register with the IRS as authorized e-file providers before they can e-file any signed-off forms.

“Tracking the ever-changing updates in e-filing requirements from each state can be a challenge for the most experienced tax preparers,” said CCH State Tax Analyst Kathleen Thies, JD. “A majority of the states now mandate e-filing of individual income tax returns and most states that do not require e-filing at least allow electronic filings. Several states have also adopted opt-out provisions for preparers who wish to file paper returns.”
 
There may also be different e-filing rules for practitioners and individual tax preparers, depending on which state they e-file returns from. The following CCH chart provides the latest e-file requirements for individual tax returns mandated by each state:

Jurisdiction

Self Filers and Tax Preparers

Comment

Citation

Alabama

Mandated for tax preparers who filed 50 or more resident or part-year resident returns using tax preparation software. Not allowed for nonresidents. 2D barcode returns do not count as e-filed returns.

Taxpayer opt-out on Form EOO, Taxpayer E-file Opt Out Election Form. Attach Form EOO to tax return with 2D barcode printed on return. Reasonable cause is exception to mandate. No penalty for failure to e-file.

Ala. Admin. Code r. 810-3-27-.04, Ala. Admin. Code r. 810-3-27-.08, Ala. Admin. Code r. 810-3-27-.09, Ala. Admin. Code r. 810-3-27-.10

Alaska

N/A, because state has no personal income tax.

 

 

Arizona

Allowed for resident, nonresident and part-year resident returns.

 

Publication AZ-1345, Electronic Filing Handbook

Arkansas

Allowed for resident, nonresident and part-year resident returns.

 

Ark. Reg. 2000-2, Form AR1000 Instructions

California

Mandated for tax preparers who filed more than 100 residents, nonresident and part-year resident returns and file one or more returns for the current taxable year using tax preparation software.

Taxpayer opt-out on Form FTB 8454, e-file Opt-Out Record for Individuals. Form is retained. No exceptions or waivers to mandate. Penalty for failure to e-file of $50/return, if due to willful neglect and not reasonable cause.

Cal. Rev. & Tax Code §18621.9, Tax News

Colorado

Allowed for resident, nonresident and part-year resident returns.

 

FYI General 16, Form 104 Instructions, 2012 CCH E-filing Survey for Individuals

 

Connecticut

 

Mandated for tax preparers who filed 50 or more resident, nonresident and part-year resident income tax returns during previous tax year.

 

Taxpayer opt-out by attaching letter to face of return indicating he/she has chosen not to e-file. Waiver available for undue hardship. No penalties for failure to e-file.

Conn. Gen. Stat. §12-686(d), Conn. Agencies Regs. §12-690-1(b)(2)(B), (c), Federal/State Electronic Filing Handbook, Policy Statement 2011(3), 2012 CCH E-filing Survey for Individuals

Delaware

Allowed for resident, nonresident and part-year resident returns, except:
·  returns reporting a lump sum distribution; and
·  returns on which number of state exemptions claimed does not match number of federal exemptions, excluding additional exemptions for taxpayers 60 years of age or over.

 

Del. Code Ann. tit. 30 §513(a), Publication DE 1345, Handbook for Electronic Filers of Individual Income Tax Returns

District of Columbia

Allowed for resident and nonresident returns.
Not allowed for part-year resident returns.

 

D.C. Mun. Regs. t. 105.11, Form D-40 Instructions

Florida

N/A, because state has no personal income tax.

 

 

Georgia

Mandated for resident, nonresident and part-year residents that:
·  are required to pay electronically;
· voluntarily pay electronically.
Mandated for any return; preparer required to e-file federal return.

 

Ga. Code Ann. §48-7-54, Ga. Comp. R. & Regs. r  560-3-2-.26(7)(a), (c), Software Developer's Electronic Filing Guidelines for Individual Income Taxpayers, Electronic Filing Frequently Asked Questions for Individuals

Hawaii

Allowed for resident, nonresident and part-year resident returns.

 

Publication EF-2, Handbook for Electronic Filers of Individual Income Tax Returns

Idaho

Allowed for resident, nonresident and part-year resident returns.

 

Idaho Code §63-115(1), Form 40 Instructions

Illinois

Mandated for tax preparers who filed 11 or more income tax returns during previous tax year and who are required to e-file federal return.

Taxpayer opt-out on Form IL-8948, Electronic Filing Opt-Out Declaration.

Ill. Admin. Code tit. 86, §760.100(c)(3), Ill. Admin. Code tit. 86, §760.210(a), Electronic Filing Program General Information, E-Connection, Fall 2011

Indiana

Mandated for tax preparers who filed more than 10 resident/nonresident returns in 2012 calendar year.

Nonresidents and part-year residents may file online or through MeF. Taxpayers opt-out on Form IN-OPT, which should be retained by preparer for five years. No waivers/exceptions to mandate. Penalty of $50/return if fail to e-file, up to $25K/yr.

Ind. Code §6-3-4-1.5, Frequently Asked Questions, Publication IND 1345, Handbook for Electronic Return Originators and Transmitters of Individual Income Tax Returns

Iowa

Allowed for resident, nonresident and part-year resident returns.

 

Iowa Admin. Code r. 701-8.5(422), E-File Handbook for Individual Income Tax Return Preparers

Kansas

Mandated for paid tax preparers who prepare 50 or more resident, nonresident and part-year resident income tax returns during any calendar year, in which case 90% of returns must be electronically filed.

No taxpayer opt-out. Tax practitioner may request hardship waiver in writing. No penalty for failure to e-file.

Kan. Stat. Ann. §79-3220(a), Form K-40 Instructions, 2012 CCH E-filing Survey for Individuals

Kentucky

Mandated for tax preparers who submitted 11 or more resident, nonresident, part-year resident returns for previous tax year.

Taxpayer opt-out on Form 8948-K, Preparer Explanation for Not Filing Electronically. Attach form to paper return. Waiver for preparer if undue hardship. Penalty of $10/return if fail to e-file.

131.250(2)(d) and (3), Handbook for Electronic Filers of Individual Income Tax Returns, 2012 CCH E-filing Survey for Individuals

Louisiana

Mandated for tax preparers who prepare more than 100 resident, nonresident, part-year resident returns in any calendar year as follows:
• 90% of the authorized individual income tax returns for returns due on or after January 1, 2012.

Taxpayer opt-out not available. Waiver available for undue hardship. Mandate authorized if taxpayer is required to file substantially same return for federal tax purposes. Beginning with 2011 tax year, mandated for all returns filed by professional athletic teams or athletes. Penalty for failing to e-file athletic returns: $1,000 per failure.

La. Rev. Stat. Ann. §47:1520, La. Admin. Code tit. 61, §4905, La. Admin. Code tit. 61, §1501, La. Admin. Code tit. 61, §1527

Maine

Mandated for tax preparers who submitted more than 10 resident, nonresident, part-year resident returns for previous tax year.

Taxpayer opt-out available. Written request required; tax preparer must note refusal in taxpayer's records. Waiver available for undue hardship (determined on case-by-case basis). Penalty of $50/return for failure to e-file in absence of reasonable cause.

Me. Rev. Stat. Ann. Tit. 36, §193, Code Me. R. §104, 2012 CCH E-filing Survey for Individuals

Maryland

Mandated for tax preparers who prepare more than 100 personal income tax returns in prior tax year.

Taxpayer opt-out by checking box on Form 502/505. Waiver available for undue hardship or reasonable cause. Penalty of $50/return for failure to e-file, up to $500, unless failure is due to reasonable cause and not willful neglect.

10-824(B), Tax General Art., 13-717, Tax General Art., 2012 CCH E-filing Survey for Individuals

Massachusetts

Mandated for all tax preparers unless preparers reasonably expect to file 10 or fewer resident, nonresident, part-year resident returns during the previous calendar year.

Taxpayer opt-out on Form EFO, Personal Income Tax Declaration of Paper Filing, which must be retained by tax practitioner. No exceptions/waivers to mandate. Penalty of $100/return for failure to e-file.

Technical Information Release 11-13, Technical Information Release 04-30, Handbook for Electronic Filers of Individual Income Tax Returns

Michigan

Mandated for tax preparers who file 11 or more resident, nonresident and part-year resident returns.

No taxpayer opt-out available. No exceptions/waivers to mandate. No penalty for failure to e-file.

Tax Preparer Handbook for Electronic Filing Programs-Individual Income Tax E-file, Unofficial Department Guidance

Minnesota

Mandated for tax preparers who reasonably expect to file more than 10 returns, including resident, nonresident and part-year resident returns, for current year.

Taxpayer opt-out available by checking box on return. Waiver available in rare circumstances. Penalty of $5/return for each Form M1 return that is not filed electronically, including returns for taxpayers who opt-out of electronic filing.

Minn. Stat. §289A.08(16), Personal Income Tax Fact Sheet No. 17

Mississippi

Allowed for resident, nonresident and part-year resident returns.

Mandate authorized, but not yet implemented.

Miss. Code. Ann. §27-3-83(1), Miss. Reg. 35.I.04, Modernized E-File Guide for Individual Income Tax

Missouri

Allowed for resident, nonresident and part-year resident returns.

 

Personal Tax Electronic Filing, 2012 CCH E-filing Survey for Individuals

Montana

Allowed for resident, nonresident and part-year resident returns.

 

Mont. Admin. R. 42.5.202

Nebraska

Mandated for tax preparers who file 25 or more resident, nonresident and part-year resident returns in prior calendar year.

Taxpayer opt-out on E-file Opt-Out Record for Individuals. Waiver for preparer if undue hardship. Penalty of $100/return if fail to e-file.

Neb. Rev. Stat. §77-1784(7), 2011 CCH E-filing Survey for Individuals

Nevada

N/A, because state has no personal income tax.

 

 

New Hampshire

Allowed for residents and part-year resident returns.

Nonresidents are not subject to the interest and dividends tax.

Form DP-10, Interest and Dividends Tax Return Instructions

New Jersey

Mandated for tax preparers who reasonably expect to prepare 11 or more resident returns, including those prepared for trusts and estates, during the taxable year.

Resident, nonresident, part-year resident returns can be e-filed. Taxpayer opt-out available on Form NJ-1040-O. Tax preparer must maintain completed and signed form in file. No waivers/exceptions to mandate. Penalty of $50/return if fail to e-file. Penalty may be abated if failure to e-file is due to reasonable cause.

N.J. Stat. Ann. §54:49-4(b), N.J. Stat. Ann. §54A:8-6.1, N.J. Admin. Code tit. 18, §35-6.4, Form NJ-1040-O Instructions, E-File Opt-Out Request Form, NJ-1040 e-File Practitioners Handbook

New Mexico

Mandated for tax preparers filing more than 25 resident, nonresident and part-year resident returns per year.

Taxpayer opt-out on Form RPD-41338, and checkbox in paid preparer’s signature box on return must be marked. Tax preparer keeps copy of Form RPD-41338 for three years. No waivers or exceptions to mandate. Penalty of $5/return if fail to e-file.

N.M. Stat. Ann. §7-1-71.4, N.M. Admin. Code tit. 3, §1.4.17, N.M. Admin. Code tit. 3, §3.12.13, Fed/State Electronic Filing Guide for Personal Income Tax Returns, Form PIT-1 Instructions, Personal Income Tax Return, Form RPD-41338 Instructions, Taxpayer Waiver for Preparers Electronic Filing Requirement

New York

Mandated for tax preparers who prepare authorized tax documents for more than ten different taxpayers during any calendar year beginning after 2011, and prepare one or more authorized tax documents using tax software in the subsequent calendar year. 2D barcode returns do not count as e-filed returns.

Mandated for taxpayers who prepare their own returns or other tax documents using tax software, applicable to documents filed during 2012 and 2013.

No taxpayer opt-out. No exception to mandate. Preparer penalty of $50/return or extension if fail to e-file, unless there is reasonable cause. Penalty of $500 if charge separate e-file fee; $1,000 for later occurrences.

Preparers filing returns on or after December 31, 2009 are required to register electronically with New York Department of Taxation and Finance and pay annual fee of $100.

N.Y. Tax Law, §29, N.Y. Tax Law, §32(b),(c), N.Y. Tax Law, §658(g)(10), N.Y. Tax Law, §685(u), Publication 84, Handbook for E-filers, 2012 CCH E-filing Survey for Individuals, E-file Mandate for Tax Return Preparers, TSB-M-11(12)I

North Carolina

Allowed for resident, nonresident and part-year resident returns.

 

NC Admin. Code tit. 17, r. 06B.0118, NC Admin. Code tit. 17, r. 01C.0702

North Dakota

Allowed for resident, nonresident and part-year resident returns.

 

Income Tax Update, Publication #1345ND, Electronic Filing Procedures, 2012 CCH E-filing Survey for Individuals

Ohio

Mandated for tax preparers who prepare more than 11 original (resident, nonresident, part-year resident) individual tax returns during any calendar year that begins after 2012.

Taxpayer opt-out available on Form IT EF OPT OUT. Waivers determined case-by-case; use Form IT WAIVER. Penalty of $50/return if fail to e-file.

Ohio Rev. Code Ann. §5747.082(C), IT 2009-01, Ohio Dep't. of Revenue, Practitioner Electronic Filing Booklet

Oklahoma

Mandated for tax preparers who filed more than 10 resident returns for prior tax year. Nonresident and part-year resident returns allowed only through MeF.

No taxpayer opt-out. No exceptions to mandate. No penalties for failure to e-file.

Okla. State. tit. 68, §2385, Okla. Admin. Code §710:50-3-3, Okla. Admin. Code §710:50-3-46, MeF Electronic Return Filing Guide, 2012 CCH E-filing Survey for Individuals

Oregon

Mandated for tax preparers who expect to file 11 or more returns.

Taxpayer opt-out available on federal Form 8948, Preparer Explanation for Not Filing Electronically. Tax preparer must check box 1 and write his or her Oregon license number at the top of the form. Waiver for undue hardship.

Or. Rev. Stat. §305.820(1), Sec. 2, Or. Rev. Stat. §314.364, Or. Admin. R. 150-314.385(3), Or. Admin. R. 150-314.364(B), Oregon Department of Revenue, January 13, 2012

Pennsylvania

Mandated for tax preparers who filed 50 or more resident, nonresident and part-year resident returns (original or amended) for previous tax year.

Penalty for failure to e-file of 1% of tax due, up to $500, but not less than $10. Taxpayer opt-out by checking box on return. Waiver for undue hardship.

72 P.S. §10003.8, 72 P.S. §10, Form PA-40 Instructions, Notice, July 3, 2010, Notice- Method of Filing

Rhode Island

Mandated for tax preparers who prepare more than 100 resident, nonresident and part-year resident returns in previous year.

Taxpayer opt-out available by writing letter; attach letter to paper return. Waiver available for undue hardship. Preparers that fail to comply with mandate may, after a hearing to show cause, be precluded from preparing and filing state tax returns.

R.I. Gen. Laws §44-1-31.1, R.I. Code R. ELF 09-01, 2010 CCH E-filing Survey for Individuals

South Carolina

Mandated for tax preparers who filed 100 or more resident, nonresident and part-year resident returns for a tax period for same tax year.

Taxpayer opt-out with form letter. Exception to mandate if financial hardship. Penalty of $50 per return if fail to e-file.

S.C. Code Ann. §12-54-250(F)(1), Department of Revenue

South Dakota

N/A, because state has no personal income tax.

 

 

Tennessee

Allowed for resident, nonresident and part-year resident returns.

Electronic filing of returns available through state's website at: https://apps.tn.gov/etax.

Important Notice, Form INC 250 Instructions

Texas

N/A, because state has no personal income tax.

 

 

Utah

Mandated for tax preparers who filed 101 or more resident, nonresident and part-year resident returns.

Taxpayer opt-out on Form TC-831, Request to Elect-out of Electronic and 2-D Bar Code Filing. Tax preparer retains form. Exception to mandate if undue hardship. No penalties for failure to e-file.

Utah Code Ann. §59-10-514.1, 2012 CCH E-filing Survey for Individuals

Vermont

Allowed for resident, nonresident and part-year resident returns.

 

Form IN-111 Instructions, Handbook on Modernized E-file (MeF),

Virginia

Mandated for tax preparers who filed 50 or more resident, nonresident and part-year resident income tax returns during a previous tax year.

Taxpayers opt out by providing code in election field on return. Request exception to mandate on Form VA-8454P, Paid Tax Preparer Hardship Waiver Request, and mail form in. No penalty for failure to e-file.

Va. Code Ann. §58.1-9(C ), (D), Publication VA-1345, Handbook for Electronic Filers, 2012 CCH E-filing Survey for Individuals

Washington

N/A, because state has no personal income tax.

 

 

West Virginia

Mandated if preparer uses software to prepare more than 25 resident, nonresident and part-year resident tax returns.

Mandated for self filers who had total annual liability of $100,000 or more during prior tax year.

Statutory and regulatory authority lower threshold to $50,000 for tax years after 2012, $25,000 for tax years after 2013 and $10,000 for tax years after 2014. However, department publication retains $100,000 threshold for tax years after 2012.

Taxpayers opt-out on Opt Out Form, which is retained by preparer. Preparers may request waiver on Form HW-1, Income Tax Preparer Hardship Waiver Request. Penalty of $25/return if fail to e-file.

W. Va. Code §11-10-5z, W. Va. Code §11-21-54, W. Va. Code St. R. §110-10D-9.1, Publication WV-1345, Electronic Filing Procedures, Electronic Funds Transfer Program Information Guide, 2011 CCH E-filing Survey for Individuals

Wisconsin

Mandated for tax preparers who filed 50 or more resident, nonresident and part-year resident returns for prior tax year.

Taxpayers may opt out by writing “no e-file” before signature on return. Exception to mandate for undue hardship; preparers submit written request. No penalty for failure to e-file.

Wis. Admin. Code §2.08(3), Publication 115, Handbook for Federal/State Electronic Filing of Individual Income Tax Returns, Electronic Filing Requirement for Tax Return Preparers

Wyoming

N/A, because state has no personal income tax.

 

 

About CCH, a Wolters Kluwer business

CCH, a Wolters Kluwer business (CCHGroup.com) is a leading global provider of tax, accounting and audit information, software and services. Celebrating its 100th anniversary in 2013, CCH has served tax, accounting and business professionals since 1913. Among its market-leading solutions are the ProSystem fx® Suite, CCH Integrator™, CCH® IntelliConnect®, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill. Follow us on Twitter @CCHMediaHelp. Wolters Kluwer (www.wolterskluwer.com) is a market-leading global information services company. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

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