5 steps to review e-file requirements and processes

Research mandatory e-filing requirements for federal and state tax returns. Preparers who file 11 or more U.S. individual or trust tax returns are required to e-file.

Review the information currently on file with the IRS authorizing the firm as an IRS e-file provider, or register as an e-file provider with the IRS. If information on file with the IRS has changed, update it or reapply as a new e-file provider.

Train professional and administrative staff on firm e-filing processes. Submit completed returns electronically only upon receipt of both the signed e-file authorization forms and documentation acknowledging review and approval of draft returns from the client. Retain documentation acknowledging the client’s approval of the return and the e-file authorization form. When filing electronically, save acknowledgments from the IRS or other tax authorities indicating return acceptance, not just receipt, for at least three years.

Inform clients that returns will be filed electronically in the client engagement letter and cover letter sent with the tax organizer, and that clients will be required to review and approve draft returns prior to such filing. Signed Form 8879, IRS e-file Signature Authorization and state equivalents must be received by the firm before tax returns are filed electronically. If a joint income tax return is filed, both spouses must sign the engagement letter and e-file authorization form.

Obtain a signed Form 8878, IRS e-file Signature Authorization for Form 4868 or Form 2350 or state equivalents, prior to filing an application for an extension of time to file.

what to do now … before the big rush

5 steps to review e-file requirements and processes