Legal Question in Tax Law in Pennsylvania

Pennsylvania requires any tax preparer who "submits" at least 50 tax returns to file electronically. That means that I can prepare as many returns as I want but if I don't "submit" any tax returns to the Dept of Revenue then I do not come under the requirements to e-file.

PA doesn't define the word "submit" but the IRS in similar law and regulations says that e-filing or mailing the tax return for the client constitutes a submission. If the client mails the tax return themselves then I am not submitting the return. I would assume PA would have a similar definition for the word "submit". So that allows me an out if I as a preparer don't want to do any e-filing.

My question is this: Is there any legal limitation or some reason the Pennsylvania legislature would hesitate to simply require all tax preparers who "prepare" more than 50 returns to e-file all tax returns for their clients. Why would they use the term "submit" rather than the term "prepare"?

I realize that the burden of filing a tax return rests solely with the taxpayer and not with the preparer. How would that knowledge change how the government views its ability to make requirements of the tax preparer?

Relevant Pennsylvania Code:

Under the provisions of section 10 of the Fiscal Code (72 P. S. � 10) (Act 2009-50), [PA Dept of Revenue] announces that, ... any PA-40 (2010) Pennsylvania Personal Income Tax Return prepared by a third party preparer who submitted at least 50 PA-40 (2009) Pennsylvania Personal Income Tax returns required to be filed in the 2010 calendar year ... shall be filed using the electronic method (e-file) in the manner prescribed by Departmental instructions.


Asked on 10/14/13, 4:48 am

1 Answer from Attorneys
ERNEST LEE ERNEST LEE LLP

You have three options;

1) obtain software that will allow you to file electronically,

2) the taxpayers can specifically direr you to file paper forms, or

3) request a waiver.

NOTICES - DEPARTMENT OF REVENUE

Method of Filing Annual Notice for the Tax Year Beginning on or After January 1, 2010

[40 Pa.B. 3745] [Saturday, July 3, 2010]

...

 A third party preparer is not required to e-file a return:

 (1) Upon which the taxpayer has specifically directed the preparer to use the paper forms prescribed by the Department.

 (2) If the preparer's tax software does not support e-filing of a required attachment to the return.

 (3) That may not be e-filed under Chapter 4, ''Filing An Electronic Return,'' of PA-1345 Handbook For Electronic Filers of Pennsylvania Individual Income Tax Returns for Tax Year 2009.

 If the tax software of a preparer who is required to e-file under this notice cannot support the e-filing of PA-40 returns in conformity with Chapter 4, ''Filing An Electronic Return,'' of PA-1345 Handbook For Electronic Filers of Pennsylvania Individual Income Tax Returns for Tax Year 2009, tax software that does so support the e-filing of PA-40 returns must be acquired. In accordance with 72 P. S. � 10(c), however, the Department may waive the method of filing prescribed under this notice if the Department determines the provisions of this notice constitute undue hardship on the preparer. The preparer must request a waiver in writing that clearly states why the filing method causes an undue hardship. Requests for waivers shall be mailed to the Department of Revenue, Bureau of Individual Taxes, P. O. Box 280507, Harrisburg, PA 17128 by November 30, 2010. If the Department grants the waiver, the preparer may file a signed, paper Pennsylvania Personal Tax Return or Returns beginning on January 1, 2011, through December 31, 2011.

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Answered on 3/02/15, 9:03 am


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