LMSB Commissioner Letter to CFOs of Mid-Size Corporations
October 18, 2006
Dear Chief Financial Officer, Name Control:
Last year the Internal Revenue Service and Department of the Treasury issued regulations that require certain corporations to electronically file their Forms 1120 or 1120S. I am writing to you to share information about electronic filing and the resources available to assist you in making the transition from paper filing to electronic filing. Although your corporation may not be required to electronically file, you may do so voluntarily.
Corporations required to e-file, starting with tax periods ending on or after December 31, 2006, are those with assets of $10 million or more that file Form 1120 or 1120S and that file over 250 returns per year, including income tax, excise and employment tax, as well as information returns such as W-2s and 1099s.
Whether your corporation is required to e-file or chooses to do so voluntarily, you should keep in mind the following important points:
If you will use a tax professional to prepare your income tax return, you should check with them early and ensure they have the software and systems in place to generate an electronic return and are an IRS Authorized e-file Provider.
If you or your staff will prepare your corporation’s income tax return, you should discuss electronic filing with your software vendor so that you can adjust your tax preparation systems to generate an electronic return. You will also need to take application and registration steps required to transmit electronic returns directly to IRS.
If you file your return electronically, an important piece of data that needs to be included in your return file is your name control. We have provided the name control for your corporation at the top of this letter. Please provide it to your e-file provider.
IRS has electronic filing information and guidance available on our internet site, www.irs.gov. Simply click on the “e-File” logo, and then click on “E-filing for Large and Mid-size Corporations.”
Our web site provides directions and guidance for e-filing, and points of contact if you need additional information. From our web site you can also subscribe to “e-file news for large and mid-size corporations,” an email news service that will keep you alerted to new information as it becomes available.
We realize that the change from paper to electronic filing is not without its challenges. Over the past several months IRS officials have been meeting with corporate taxpayer representatives, tax and accounting organizations and tax software vendors to identify and address questions and concerns about electronic filing. We will continue working with stakeholders and updating our web site with information as it develops.
Please accept my thanks for your attention to this important matter and your support in improving America’s tax system. We look forward to your corporation joining the thousands of others that have filed electronic returns in recent years.
Deborah M. Nolan