IRS Considering Free Electronic Filing for Employment Tax Returns

By Sally P. Schreiber, J.D.

From the IRS

In an attempt to address the low rate of e-filing of employment tax returns (currently 31%), the IRS announced that it is considering opening a free e-file program for businesses to e-file employment tax returns (i.e., forms in the 94x series, such as Forms 940, 941, 943, 944, and 945, used to report FUTA, FICA, and income taxes withheld) (Notice and Request for Comments, 80 Fed. Reg. 12,062 (March 5, 2015)).

Comments are requested on the following topics, among others:

  • What do businesses or agencies see as the main advantages and disadvantages to employers to e-file employment tax returns through a free online filing option offered through a public-private partnership?
  • Under which circumstances would employers currently mailing in employment tax returns use a free online filing option?
  • Under which circumstances would employers or their tax professionals currently e-filing employment tax returns use a free online filing option?
  • What is the best way to market a free online filing option?
  • Under which circumstances would companies that currently offer electronic filing of employment tax returns or those capable of developing a free online filing option for employment tax returns participate in a public-private partnership to offer free online filing?
  • What type of support would companies need from the IRS?
  • Should participation in free filing be limited based on considerations such as an employer's total payroll, total number of employees, total assets, or type of business?
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