As part of an ongoing effort to remove impediments to e-filing, the Internal Revenue Service (IRS) has announced regulatory revisions designed to reduce the reporting burden on corporations and shareholders.
“This is a win-win situation for businesses, shareholders and the IRS,” Commissioner Mark Everson said in a prepared statement. “Business and shareholders will be relieved of excessive reporting obligations that really no longer made sense, while the IRS will still receive the information it needs for compliance. As a bonus, a number of roadblocks to IRS e-file also will be removed.”
The changes apply to more than 20 regulations involving corporate and shareholder reporting requirements. A number of the revisions apply to rules governing corporate transactions, such as transfers to a corporation, mergers, spin-offs or liquidations. The revised regulations also eliminate several requirements for taxpayers to provide their signatures, allowing more taxpayers to file their returns electronically.
"Signature requirements have long been a problem, even on the individual taxpayer side, so this is a big step that will make e-filing easier," Mark Luscombe, CCH Principal Tax Analyst told AccountingWEB.
Rev. Proc 2006-21 modifies Revenue Procedure (Rev. Proc.) 89-56, 1989-2 C.B. 643, Rev. Proc. 90-39, 1990-2C.B. 365, and Rev. Proc. 2002-32, 2002-1 C.B. 959 and applies to any taxpayer applying for a consent or waiver under these procedures.
To remove e-filing impediments, Rev. Proc 2006-21 eliminates the signature requirements of Rev. Proc. 89-56, Rev. Proc. 90-39 and Rev. Proc. 2002-32. Rev. Proc. 2006-21 also outlines several statements that can be used in lieu of statements and requirements contained in the three older Rev. Procs. Revenue Procedure 2006-21 became effective on May 26, 2006, however, taxpayers may rely on this revenue procedure for prior taxable years.
“Impact of this is that if you want to file electronically, the fact that you are making these certain elections shouldn't prevent you from doing so,” Bob D. Scharin, Senior Tax Analyst, RIA, explained.