For the 2005 tax year, mandatory e-filing of returns only applies to the largest corporations and non-profit organizations. But the number of businesses and non-profits that must file electronically will grown exponentially for the 2006 tax year, and many of those taxpayers are not equipped to make this switch, according to Michael P. Dolan, the national director of IRS policies and dispute resolutions at KPMG LLP-Washington Tax. In a recent issue of CCH’s Journal of Tax Practice and Procedure, Mr. Dolan outlines the new requirements and what will be necessary to prepare to meet those requirements for businesses and non-profits that will be subject to the new e-filing rules. The thresholds are dropping pretty low, he notes. Business with assets of $10 million will be subject to the new requirements for the 2006 tax year-a big change from the threshold of $50 million. Practitioners and taxpayers need to prepare for this change and start the process of getting the necessary infrastructure in place.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products.