Because of this, third-party transmitters will pass on these incentives to their tax practitioner clients and continue to compete based on the products and services they offer. Practitioner's costs include the electronic filing fees and the additional processing costs required for an electronically filed return. Because not every return can be filed electronically and an electronic return is not paperless, the practitioners sort returns into paper and electronic and fill out paper forms for each electronic return. Practitioners will welcome these incentives. However, without changes to the electronic filing system to accept all returns and to become entirely paperless, tax practitioners will not fully embrace electronic filing.
Consumers can purchase software to prepare their tax return and file their return electronically.
With an incentive, companies offering electronic filing to consumers can reduce their costs for development, support and transmission. Because a separate fee cannot be charged for electronic filing, the remaining costs will be added to the cost of the package resulting in higher software costs. The legislation proposes extensions for electronically filed returns. Because there is no IRS data entry required for an electronically filed return, we support extensions to file for electronically filed returns. In addition, allowing the electronic return originator to communicate on electronically filed returns will also be a benefit for the electronic filer.