IRS Proposed Regulations Would Require More Preparers to File Returns Electronically

The IRS published proposed Treasury regulations on June 1, 2018, that would alter the rules for required electronic filing of certain information returns. This would include information returns in the Forms 1098, 1099, 1042 and 5498 series, which are used to report information for IRAs, retirement plans, health savings accounts, Coverdell education savings accounts, college savings IRC Sec. 529 plans, and ABLE accounts.

The proposed regulations would require preparers to file information returns electronically if the aggregate number of returns totals 250 or more. Current rules require electronic filing of an information return by type, only if that specific return filing totals 250 or more, not aggregated with other information returns. The proposed regulations cite the fact that electronic transfer of data and various filings have in many instances become the norm, and electronic filing generally should not pose a hardship for most preparers. 

The regulations are proposed to be effective for information returns filed after December 31, 2018. This would appear to include those returns that report 2018 information and are filed in 2019. The regulations also propose that corrected information returns in any quantity must be filed electronically if the original filing was by electronic means and the correction is filed after December 31, 2018. The ability to request a waiver of the electronic filing requirement would remain available under these proposed regulations. 

June 1, 2018, marks the beginning of a 60-day period during which public comments and requests for a public hearing may be made, and thus, must be received on or before July 30, 2018. See the regulations for submission details.

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