TIR 05-22 Modifies TIR 04-30
This Technical Information Release announces new electronic filing requirements and technical amendments to the electronic filing requirements set forth in TIR 04-30. All of the electronic filing requirements of TIR 04-30 remain in place. This TIR expands the application of TIR 04-30 for certain corporations and partnerships, and in addition, makes a few technical changes. Taxpayers should still refer to TIR 04-30 for most electronic filing requirements.
II. New Electronic Filing Provisions A. Corporations Filing U.S. Form 1120, 1120-A, or 1120S with Revenue Amounts that Exceed $100,000 Must File and Pay their Corporate Excise Electronically
The requirements announced here expand and clarify the $100,000 electronic filing threshold explained in TIR 04-30 III.C., which refers only to line 1c from U.S. Forms 1120 or 1120-A. The electronic filing requirement announced in this section of this TIR does not apply to financial institutions, insurance companies and public utilities, which continue to be subject to the electronic payment mandate established in TIR 04-30, section II.A.
As of January 1, 2006, corporations with any single or combined amount of gross receipts or sales or other income on the U.S. Corporation Income Tax Return that is over $100,000 must file and pay Massachusetts corporate excise electronically. Corporations with income totaling more than $100,000 on the following lines of U.S. Form 1120 or 1120-A must file and pay electronically: gross receipts or sales (line 1 or line 1c); dividends (line 4); interest (line 5); gross rents (line 6); gross royalties (line 7); capital gain net income (line 8); net gain from the sale or exchange of business property (line 9); and other income (line 10). Loss reported from the sale or exchange of business property on line 9 should not be subtracted from income reported on other lines for purposes of calculating whether the threshold has been met. Corporations over the threshold announced here must make all payments and returns electronically as of January 1, 2006.
S corporations with income totaling more than $100,000 on the following lines of U.S. Form 1120S must file and pay electronically: gross receipts or sales (line 1c); net gain from the sale or exchange of business property (line 4); and other income (line 5). Loss reported from the sale or exchange of business property on line 4 and other loss reported on line 5 should not be subtracted from income reported on other lines for purposes of calculating whether the threshold has been met. S corporations over this threshold must make all payments and returns electronically as of January 1, 2006.
B. Corporations and Partnerships Subject to the Electronic Filing Mandate Must Continue to File Electronically Even If They Do Not Meet the Electronic Filing Threshold in Subsequent Years
This TIR announces that any corporation or partnership that has reached any electronic filing threshold and is accordingly required to file and pay electronically in one year must continue to file and pay electronically in subsequent years even if the corporation or partnership does not reach the electronic filing threshold in subsequent years. This "once an electronic filer, always an electronic filer" rule applies to all corporations and partnerships subject to electronic filing requirements, and applies to all corporate and partnership electronic filing requirements announced in TIR 04-30 and in this TIR.
C. Income Tax Preparers Subject to the Electronic Filing Mandate of TIR 04-30 May be Required to Retain Documentation of Taxpayer's Preference to File on Paper
The Department may require practitioners subject to the Electronic Filing Mandate of TIR 04-30 who have a high percentage of paper filers to retain documentation of their clients' preference for paper filing. TIR 04-30 requires practitioners filing 100 or more original Forms 1 and 1-NR/PY during calendar 2005 or in subsequent calendar years to file electronically unless the taxpayer specifically directs that filing be on paper. A practitioner notified by the Department must obtain a taxpayer signature on a separate form directing the practitioner to file a paper tax return. The practitioner must maintain this acknowledgement and produce it for DOR upon request. This requirement is a new administrative requirement that does not change the electronic filing mandate announced in TIR 04-30.
Commissioner of Revenue
December 15, 2005