I am still holding out and only preparing paper tax returns for our clients and am not planning to change any time soon.  However, I am monitoring the IRS and their rules for trying to force more of us professional preparers to use their electronic filing for 1040s. 

I was browsing the newest draft IRS forms and came across the draft for the December 2011 version of Form 8948: Preparer Explanation for Not Filing Electronically.

As I have discussed on numerous occasions, there has been a lot of debate as to the coverage of the new more aggressive mandatory e-filing rules in regard to our Preparing or Filing tax returns for clients. It has always been our practice to prepare tax returns and allow the clients to mail them in themselves. 

The following is from the instructions to the new version of the 8948: 

A specified tax return preparer is a tax return preparer, as identified in section 7701(a)(36) and Regulations section 301.7701-15, who is a preparer of covered returns and who reasonably expects (if the preparer is a member of a firm, the firm’s members in the aggregate reasonably expect) to file 11 or more covered returns during a calendar year.

Aggregate filing of returns For the e-file requirement, “aggregate” means the total number of covered returns reasonably expected to be filed by the firm as a whole. For example, if a firm has 2 preparers and each preparer in the firm reasonably expects to prepare and file 6 covered returns, the aggregate for the firm equals 12 covered returns, and each preparer is a specified tax return preparer.

When a return is considered filed by a preparer. For the e-file requirement, a return is considered filed by a preparer if the preparer or any member, employee, or agent of the preparer or the preparer’s firm submits the tax return to the IRS on the taxpayer’s behalf, either electronically or in paper format. For example, the act of submitting includes having the preparer or a member of the preparer’s firm drop the return in a mailbox for the taxpayer. Acts such as providing filing or delivery instructions, an addressed envelope, postage estimates, stamps, or similar acts designated to assist the taxpayer in the taxpayer’s efforts to correctly mail or otherwise deliver a paper return to the IRS do not constitute filing by the preparer as long as the taxpayer actually mails or otherwise delivers the return to the IRS.

That last sentence seems to make it very clear that tax returns mailed in to IRS by our clients are not being filed by us and thus do not count towards the 11 or more threshold for mandatory e-filing.