Moving to E-File

[MDFinnigan]

I confess, I am a dinosaur. I still am filing paper returns. Obviously, with the new rules for preparers coming for 2010, I am finally moving to efile. My question - What steps do I take to begin efiling?

Thanks.

[Lion EA]

http://www.irs.gov/efile/article/0,,id=131140,00.html

Go to IRS.gov and click on the Tax Professionals tab and then along the left click on Basic Tools for Tax Professionals. The steps are laid out in outline form for you. Get set up now and e-file some of your extensions to get your feet wet.

[JohnH]

You don't have to do it this upcoming year if you don't want to, provided you prepare 100 or less tax returns. The number drops to 10 returns for 2012 so that's only a one-year reprieve.

I'm already working on winnowing the number down to well under 100 for next year. I want to stay well under 100 so I can accept a few new clients if they're the right ones. Then if I can get the last 10 clients to absorb a 1,000% rate increase in 2012, I'll be able to keep paper filing indefinitely.

(We're not dinosaurs, but we do qualify as Neandertals)

[Lion EA]

John, you could sign up to e-file, just in case, and then never ever really e-file. That way, you could dip your toe in the water with maybe one return, maybe your own if you don't want to expose any of your clients to technology. Or, e-file your own or someone's extension next year even though paper filing the return. Once you try one, you might find it's a bit like potato chips and you can't stop at just one. Just one copy to assemble for your client, unless they like theirs e-mailed to them or uploaded in .pdf format creating no paperwork for you at all. Your copy can be saved in your computer and the government copies e-filed, so a savings on paper and toner and time and file cabinets. And, an even bigger savings if multiple states that require federal or other state copies. Your clients will be thrilled with you that they don't have to trek to the PO and wait in line to have their fat packages weighed. A single-sheet payment voucher would be the most they have to mail, and nothing to mail if a refund or a direct debit. They will love you that they receive their refunds faster. My clients started with e-filing and then direct deposit and then direct debit Your clients will love you that they're all done when they sign and can forget about taxes for another year. You can raise fees on clients that love you. I'm a 63-year-old gray-haired lady but no neanderthal; I love e-filing.

[OldJack]

>> sign up to e-file, just in case, and then never ever really e-file. <<

In a moment of weakness I signed up one day before this last tax season.

I expected to receive some sort of confirmation with some kind of magic number to use. I received no such thing from the IRS so I paper filed everything again this year.

[Lion EA]

A good bit of this is done by your software company, but here's the IRS statement (I think you should call the e-Help Desk):

Acceptance When the IRS completes the processing of the IRS e-file application we will acknowledge its receipt with a letter, and assign identification numbers, after suitability is passed, and where applicable, issue password for testing based on the provider option you have chosen as follows:

• EROs, Transmitters, Software Developers, Reporting Agents and Intermediate Service Providers will receive an Electronic Filing Identification Number (EFIN) for the home location, which is each location based on the firm's business address;
• Transmitters and Software Developers will also receive an Electronic Transmitter Identification Number (ETIN) and a password for testing.

After your application is processed and all involved parties pass the suitability test, you will be sent an acceptance letter. Transmitters and Software Developers must also complete testing before an acceptance letter is sent. Once accepted, you do not have to reapply each year as long as you continue to e-file returns.

After testing is completed satisfactorily, Transmitters will be issued a password and EMS Login that authorize them to transmit e-filed return data during the filing season which is scheduled to begin January 12, 2007, and continues through October 15, 2007 for individual income tax returns. IRS e-file for Business and Information returns is a year-round electronic filing option. Testing is required each year for transmitters and software developers.

The IRS will send you an e-file marketing/ promotional kit that entitles you to identify yourself as an "Authorized IRS e-file Provider". We support IRS e-file with advertising on radio, television and in print and provide material that you can customize for your own advertising and promotion.

For additional assistance, click on the e-services tutorials or call the e-Help Desk, toll-free at 1-866-255-0654.

[imjulier]

E-filing is REALLY easy....I can't imagine doing it any other way. But I do have a couple people each year who refuse e-file and insist on having hardcopy to mail in.....under new requirements, will I have to force them to e-file?

[JohnH]

I still think there's going to be some sort of opt-out provision, although I haven't seen anything on it yet.

[Lion EA]

One of my hold outs, I've been talking to. This year, I talked to the husband a lot about upcoming mandatory e-filing and sent him home with articles for his wife to read. They are more accepting than I expected: It is what it is-type of response. So they will probably be fine and not return to DIY. My others are more my fault than theirs. They are individuals that also have trusts or other entities that I have not yet been e-filing. Therefore, they chose to mail in all of their returns since they had to mail in some. So, if I get on the stick and start e-filing entities, they should be easy to convert. CT has its own bizarre system and doesn't accept entities through my software company the way it accepts individuals, so I just haven't taken the time to see how it's done. Guess I finally have to learn CT's system this off-season. I still want an easy to fill out opt-out form, though. CT doesn't have an opt-out form but does require a written opt out. NY has a nice opt-out form.