The IRS has issued final regulations regarding electronic filing (e-filing) of certain returns and documents. The regulations apply to those who must file returns for partnerships, corporations, unrelated business income tax, withholding, excise taxes, as well as information returns, disclosure statements, and other documents. The electronic filing requirements generally take effect for applicable returns and documents required to be filed in 2024, except for returns of tax-exempt organizations, which apply to tax years beginning after July 1, 2019.
The final regulations largely adopt the proposed regulations from 2021 for electronic filing under several Code Sections. The regulations require e-filing by taxpayers other than individuals if they are required to file 250 or more returns during the calendar year. The final rules eliminate the e-filing exception for income tax returns of corporations that report total assets under $10 million at the end of their taxable year. Partnerships with more than 100 partners must e-file information returns, and partnerships required to file at least 10 returns of any type during the calendar year must e-file their partnership return.
Filers are already required to file information returns and statements electronically if they are required to file 250 or more returns during the calendar year under Code Sec. 6011(e) and related regulations. The proposed regulations would have reduced the applicable threshold to 100 or more returns for returns required to be filed during 2022 and 10 or more returns for returns required to be filed after calendar year 2022. However, the final regulations adopt the electronic-filing threshold of 10 for returns required to be filed on or after January 1, 2024.
The regulations also provide a waiver from electronic filing to any person who establishes undue hardship. The Treasury and IRS anticipate providing additional details on the specific hardship-waiver procedures for each form affected by the final regulations, including exemptions for taxpayers whose religious belief conflict with the electronic filing requirement. However, the final regulations do not provide for waivers and exemptions in all circumstances or for all tax forms required to be electronically filed.