Mandatory Electronic or 2-D Filing Requirements

H.B. 190, passed by the Utah Legislature in the 2005 General Session and signed by the Governor, mandates electronic filing or 2-D bar coded returns for income tax return preparers, effective January 1, 2005.

Provisions of the bill require electronic filing of returns or the filing of returns that include a 2-D bar code of the return data by return preparers who prepare a substantial portion of the return for compensation, but does not include someone who:

merely types, reproduces or performs a similar function relating to the return (secretarial duties),
prepares the return as an employee for the employer or an officer or another employee of the employer,
prepares the return in a fiduciary role for another person, or
prepares the return in response to a tax order issued to the taxpayer.

Amended returns and prior year returns are not subject to this provision.

There is a volume requirement as to whether a preparer must file electronically or with a 2-D bar code. Those subject to the mandatory requirements are preparers who prepare in any calendar year 101 or more Utah individual income tax returns. The prepared returns of two or more preparers affiliated with the same establishment are added together for this decision. Once the volume requirement is met, all returns filed in subsequent calendar years must be filed electronically or with 2-D bar codes.

There are three exceptions to this mandate:

If a schedule is required to be attached to the return that cannot be transmitted electronically or included in the 2-D bar code,
If the taxpayer requests that his return not be filed electronically or with a 2-D bar code, and
The Commission waives the requirement for a preparer for one or more returns because of “undue hardship” on the preparer to file electronically or with a 2-D bar code.