Treasury and IRS Issue Final Regulations on e-file for Businesses

February 21, 2023

The U.S. Treasury Department and the IRS recently issued final regulations T.D. 9972, amending the rules for filing returns and other documents electronically (e-file). The regulations will require certain filers to e-file beginning in 2024.

T.D. 9972 affects filers of partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports and certain excise tax returns. The final regulations reflect changes made by the Taxpayer First Act (TFA) to increase e-filing without undue hardship on taxpayers.

Specifically, the final regulations:

  • reduce the 250-return threshold enacted in prior regulations to generally require electronic filing by filers of 10 or more returns in a calendar year. The final regulations also create several new regulations to require e-filing of certain returns and other documents not previously required to be e-filed;
  • require filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold and is required to e-file their information returns. Earlier regulations applied the 250-return threshold separately to each type of information return covered by the regulations;
  • 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, and
  • require partnerships with more than 100 partners to e-file information returns, and they require partnerships required to file at least 10 returns of any type during the calendar year to e-file their partnership return.

The final regulations generally provide hardship waivers for filers that would experience hardship in complying with the requirements and administrative exemptions from the requirements.

To help with the e-filing process, the IRS opened a free online portal called the Information Returns Intake System (IRIS) last month to help businesses file Form 1099-series information returns electronically. For more information on IRIS, see “IRS Opens Online Portal for Filing Form 1099 Information Returns.”