IRS’s 2024 E-Filing Mandate: What You Need to Know

Oct 04, 2023

Earlier this year, the Internal Revenue Service (IRS) finalized regulations mandating the electronic filing of the majority of tax and information returns in a strategic bid to curtail the influx of paper returns.

What has changed?

Starting January 1, 2024, companies filing 10 or more returns of any type per calendar year, must now submit these returns electronically instead of paper filing. This new regular significantly reduces the prior 250-return threshold.

Filers are now required to aggregate almost all information return types covered by the regulation to determine whether they meet the 10-return threshold. Below are just some of the forms impacted by the new requirement, most notably, Form W-2 and Form 1099:

  • Corporate income tax returns
  • Unrelated business income tax returns
  • Withholding tax returns
  • Certain information returns (W-2, 1099)
  • Registration statements
  • Disclosure statements
  • Notifications
  • Actuarial reports and certain excise tax returns

For a complete list of forms that must be aggregated, visit the IRS site.

Other noteworthy considerations:

  • If a taxpayer is filing an amended return, the amended return must be filed using the same method as the original return.
  • In limited circumstances, the IRS does not support e-filing. For example, the IRS does not support electronic filing of a final Form 941. Therefore, paper filings will be accepted if an employer is required to file a final Form 941.
  • Partnerships with more than 100 partners at any time during the year must e-file.
  • The IRS released a new, free e-file portal, Information Returns Intake System (IRIS), for the 1099 series of informational returns. Though available to any business of any size, IRIS may be especially helpful to any small business that currently sends their 1099 forms on paper to the IRS.
  • Exemptions and waivers are available in limited situations. Exemptions will be allowed for members of certain religious communities that prohibit technology use.
  • Failure to meet these new e-filing regulations could result in one or more penalties.

How do I know if I am impacted?

The aggregation rule combines all previously mentioned form types to determine if the filer meets the 10-return threshold. For example, the amount of W-2 forms will be combined with the number of 1099 forms a company is required to file. If that amount is 10 or more, then that company has to electronically file all of the forms.

Next steps

Any taxpayers currently filing paper returns should consult with their William Vaughan Company tax advisor to determine if the new 2024 e-filing mandate requirements apply to them based on the number of returns that they anticipate filing in 2024 for tax year 2023. More details about these changes can be found on the IRS website, here.

Categories: Tax Compliance