IRS Proposes Electronic Filing Requirements for Certain Information Returns

The IRS has released a pre-publication version of proposed regulations amending rules intended to increase the filing of electronic returns in accordance with the Taxpayer First Act of 2019. Additionally, the IRS has withdrawn previously proposed regulations regarding electronic filing that were published on May 31, 2018.

The new proposed regulations reduce the threshold by which filers must electronically file from 250 to 100 returns for the 2022 calendar year. For filings required after calendar year 2022, the threshold will be further reduced to 10 returns. Currently, the threshold is determined separately for each type of information return. The proposed regulations would remove this rule, thus, requiring all return types to be aggregated for determining the new thresholds. The regulations further clarify that for purposes of filing amended returns, the amended form must be filed in the same manner (electronic or hardcopy) as the original filing.

Information returns affected by the proposal include, but are not limited to, the following.

  • Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
  • Form 1042-S, Foreign Persons’ U.S. Source Income Subject to Withholding
  • Form 945, Annual Return of Withheld Federal Income Tax
  • Form 5498-ESA, Coverdell ESA Contribution Information
  • Form 5498-QA, ABLE Account Contribution Information
  • Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information
  • Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits
  • Form 5500, Annual Return/Report of Employee Benefit Plan
  • Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan
  • Form 5500-EZ, Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan
  • Form 5330, Return of Excise Taxes Related to Employee Benefit Plans

Filers with an inability to file electronically (i.e., lack of Internet service) may file with the IRS to request a waiver.

A period of 60 days for submitting comments on the guidance, or to request a public hearing, will begin upon publication in the Federal Register.