E-Filing. The IRS is expanding requirements to e-File Form 1040. The latest mandate essentially makes CPAs e-File all returns. But we expect there will be exceptions allowed for folks who object. The IRS has increasingly required electronic or magnetic submission of other tax forms for years now. Technology means improved efficiency and less processing costs. E-file allows the IRS to improve its bottom line!
Objections to E-Filing: makes IRS tax audits easier?
E-Filing instantly completes all data entry for the IRS. Our guess is that manual entry is less extensive. And certainly less timely. The more tax payers using e-File, the more sophisticated statistical analysis the IRS can run. E-File allows your return to be comprehensively compared to millions of others. So from an IRS perspective, tax audit selection criteria are more refined. This allows them to lower their “tax gap” which is how much tax the IRS estimates should be collected over what they actually collect.
If you’d like a free initial consult with a Wilmington NC firm on any tax preparation, payroll, accounting or bookkeeping issue, please consider calling us at (910) 399-2705.
E-File makes Tax Refunds Faster
E-Filing has always been promoted by the tax preparation chains as desirable, often incurring additional charges. Ironically, this has turned around and bit them. E-File allows IRS tax refunds to be processed in days. So the IRS announced it won’t provide information to Rapid Anticipation Loan providers anymore (as to whether a tax payer has known liens or garnishments). Which eliminates the “guarantee” RAL companies require. President Obama specifically targeted RALs as predatory because of their high interest rates and fees. The chains are losing a major revenue stream because of the e-File program.
