Paper return processing

Does anyone know if the IRS has started processing paper returns again?

As of May 19 press release, no.
This would be a good time to implement efiling of amended returns.

That's what I was afraid of.
Someone owes me money and was planning to pay with his tax refund. He tried to file electronically in late January and it was rejected so he had to file by paper. Guess I'll have to keep waiting....

HowardS, I assume you are aware that IRS announced today that efiling of amended returns for 2019 only begins very soon.

https://www.forbes.com/sites/kellyphill ... 216ed5a0f5

I have to ask as I always do, why is ANY tax practitioner filing an original return via paper?

I have to ask as I always do, why is ANY tax practitioner filing an original return via paper?

This comes up occasionally for me for various reasons but most recently because identity theft (return already filed using their SSN). It's anytime a return is rejected during e-filing.

HowardS, I assume you are aware that IRS announced today that efiling of amended returns for 2019 only begins very soon.

https://www.forbes.com/sites/kellyphill ... 216ed5a0f5

I have to ask as I always do, why is ANY tax practitioner filing an original return via paper?

In my case my client's idiot ex-wife who used TurboTax claimed Both of their daughters after it was agreed upon to be politically correct and rotate the girls. He met the physical custody case for both and she didn't. I bet she also claimed HoH.

[ . . . ] I have to ask as I always do, why is ANY tax practitioner filing an original return via paper?

Good question (although the IRS still does not even have the capability of processing certain returns electronically, such as Form 1041 returns for estates to which section 1398 applies).

There might still be some clients who insist on paper filing (I can't think of any in my practice, though).

Regarding returns sent to the IRS centralized insolvency unit in Philadelphia with Bankruptcy Code section 505(b) prompt determination requests, the taxpayer is actually at an advantage by being required by the IRS to send a paper return. Philadelphia cannot process these electronically. However, the IRS argues that the "Philadephia" copy isn't really the "filed" copy anyway -- that the official, "filed" copy is the one that goes to the Service Center or "Campus" (e.g., Odgen, for 1120, 1120S or 1065 returns from Texas, where I am located). Especially in this COVID-19 era, Philadelphia probably isn't able to process the 505(b) requests and respond within the statutory 60-day period -- so that's a big advantage for the taxpayer in terms of obtaining the 505(b) discharge.

EDIT: Another reason for filing by paper is the limitation of the software. The Intuit Proseries software that we use cannot handle returns with amounts over a billion dollars -- either by paper or electronically. We have only a few clients with total assets or net operating losses of over a billion dollars, and a decision has been made that it's not worth the cost for us to upgrade just to be able to have software that will handle those returns.

HowardS, I assume you are aware that IRS announced today that efiling of amended returns for 2019 only begins very soon.

On the 27th I said it would be a good time to start.
On the 28th the IRS announced 2019 efile plans.
I'd say I have a lot of influence. Anybody have a wish list, I'll help out....

I had to paper file two returns this year because the ACA advanced payment had to be calculated on a pub 970 worksheet and the IRS said it couldn't be efiled. I also paper filed one with a form 1310 that the IRS said couldn't be efiled. Otherwise, I charge extra for paper filings. The 1040X efile announcement is big.

In our business - there are exceptions to every rule.

Returns over a billion dollars - holy crap Batman~

In our business - there are exceptions to every rule.

Returns over a billion dollars - holy crap Batman~

I may have mentioned this before in another thread: a while back, the national news media was going crazy about a report that someone had obtained a copy of an old state income tax return for the President where he had a net operating loss carryover of about 900 million dollars (I forget the exact figure) -- and thus that he probably had a similar NOL amount for Federal purposes. Some people (reporters or politicians, I don't remember which) expressed astonishment that someone could have such a large NOL and could legally avoid future taxes by carrying the NOL forward. On the very day that this was all over the news, I was working on a Form 1120 with a 2.6 billion dollar NOL carryover.