On March 28, 2022, President Joe Biden released the FY2023 Budget and the U.S. Department of the Treasury released a document to explain the Administration’s revenue proposals included in the budget, called the General Explanations of the Administration’s FY2023 Revenue Proposals, or “Greenbook.”
One proposal is related to electronic filing of forms and returns with the intention of supporting the broader goals of improving IRS service to taxpayers, enhancing compliance, and modernizing tax administration. The proposal would require electronic filing for the following returns:
- Form 8918, Material Advisor Disclosure Statement
- Form 8886, Reportable Transaction Disclosure Statement
- Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
- Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds
- Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business
It would also require electronic filing for returns filed by taxpayers reporting larger amounts or that are complex business entities, including:
- Income tax returns of individuals with gross income of $400,000 or more;
- Income, estate, or gift tax returns of all related individuals, estates, and trusts with assets or gross income of $400,000 or more in any of the three preceding years;
- Partnership returns for partnerships with assets or any item of income of more than $10 million in any of the three preceding years;
- Partnership returns for partnerships with more than 10 partners;
- Returns of real estate investment trusts (REITs), real estate mortgage investment conduits (REMICs), regulated investment companies (RICs), and all insurance companies; and
- Corporate returns for corporations with $10 million or more in assets or more than 10 shareholders.
Return preparers that expect to prepare more than 10 corporation income tax returns or partnership returns would be required to file these returns electronically.
The proposal would also treat all information returns subject to backup withholding the same way, such that the IRS would be permitted to require payees of any reportable payments to furnish their Taxpayer Identification Numbers to payors under penalty of perjury. The proposal would be effective for payments made after December 31, 2022.
Check out the General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals here: