Bulletin No. 2023–11

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2023–11

March 13, 2023

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

ADMINISTRATIVE

Notice 2023-21, page 563.

This notice under § 7508A of the Internal Revenue Code

postpones the beginning of the lookback periods under

§ 6511 for certain taxpayers to file a claim for refund. The

affected taxpayers are those that had tax returns due from

April 15, 2020, to July 15, 2020, or from April 15, 2021, to

May 17, 2021, and due to the COVID-19 pandemic, those

due dates were postponed by Notice 2020-23 or Notice

2021-21 to July 15, 2020 or May 17, 2021, respectively.

Those 2020 and 2021 notices did not postpone the beginning of the lookback periods under § 6511 for claiming

refunds related to those returns. This notice aligns the lookback periods with the postponed 2020 and 2021 tax return

filing due dates.

T.D. 9972, page 530.

The final regulations amend the rules for filing certain returns and statements electronically to reflect changes

made by the Taxpayer First Act of 2019 and to promote

electronic filing.

EMPLOYEE PLANS

Notice 2023-19, page 560.

This notice sets forth updates on the corporate bond

monthly yield curve, the corresponding spot segment rates

for February 2023 used under § 417(e)(3)(D), the 24-month

average segment rates applicable for February 2023, and

the 30-year Treasury rates, as reflected by the application

of § 430(h)(2)(C)(iv).

REG 122286-18, page 565.

These proposed regulations provide rules relating to the use

of forfeitures in qualified retirement plans, including a deadline for the use of forfeitures in defined contribution plans,

Finding Lists begin on page ii.

and clarify that forfeitures arising in any defined contribution

plan (including in a money purchase pension plan) may be

used for one or more of the following purposes, as specified

in the plan: (1) to pay plan administrative expenses, (2) to

reduce employer contributions under the plan, or (3) to increase benefits in other participants’ accounts in accordance

with plan terms. The proposed regulations would require that

plan administrators use or allocate forfeitures no later than

12 months after the close of the plan year in which the forfeitures are incurred. The proposed regulations also update

rules relating to the use of forfeitures in defined benefit plans

to reflect statutory changes enacted after the existing regulations were promulgated.

INCOME TAX

AOD 2023-2, page 529.

Issue 1:

Nonacquiescence to the court’s conclusion that the parties’

failure to report the transactions fully or consistently should

not be a major factor in a decision whether to allow a taxpayer to disavow the form of its transactions and also to

the standard the court applied to allow petitioner to disavow

its form in this case.

Issue 2:

Nonacquiescence to the court’s determination that the fair

market value of a “Deferred Payment Right” (as described

therein) for purposes of section 351(b)(1) is not equal to its

issue price.

T.D. 9973, page 557.

This document contains final regulations that treat members of a consolidated group as a single United States

shareholder in certain cases for purposes of section 951(a)

(2)(B) of the Internal Revenue Code.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

March 13, 2023 

Bulletin No. 2023–11

Actions Relating to Court

Decisions

It is the policy of the Internal Reve­

nue Service to announce at an early date

whether it will follow the holdings in cer­

tain cases. An Action on Decision is the

document making such an announcement.

An Action on Decision will be issued at

the discretion of the Service only on un­

appealed issues decided adverse to the

government. Generally, an Action on De­

cision is issued where its guidance would

be helpful to Service personnel working

with the same or similar issues. Unlike a

Treasury Regulation or a Revenue Ruling,

an Action on Decision is not an affirma­

tive statement of Service position. It is not

intended to serve as public guidance and

may not be cited as precedent.

Actions on Decisions shall be relied

upon within the Service only as conclu­

sions applying the law to the facts in the

particular case at the time the Action on

Decision was issued. Caution should be

exercised in extending the recommenda­

tion of the Action on Decision to similar

cases where the facts are different. More­

over, the recommendation in the Action

on Decision may be superseded by new

legislation, regulations, rulings, cases, or

Actions on Decisions.

Prior to 1991, the Service published

acquiescence or nonacquiescence only

in certain regular Tax Court opinions.

The Service has expanded its acqui­

escence program to include other civil

tax cases where guidance is determined

to be help­ful. Accordingly, the Service

now may acquiesce or nonacquiesce in

the holdings of memorandum Tax Court

opinions, as well as those of the Unit­

ed States District Courts, Claims Court,

and Circuit Courts of Appeal. Regard­

less of the court decid­ing the case, the

recommendation of any Action on De­

cision will be published in the Internal

Revenue Bulletin.

The recommendation in every Action

on Decision will be summarized as ac­

quiescence, acquiescence in result only,

or nonacquiescence. Both “acquies­

cence” and “acquiescence in result only”

mean that the Service accepts the holding

of the court in a case and that the Ser­

vice will follow it in disposing of cases

with the same controlling facts. How­

ever, “acqui­

escence” indicates neither

approval nor disapproval of the reasons

assigned by the court for its conclusions;

whereas, “acqui­escence in result only”

indicates disagree­ment or concern with

some or all of those reasons. “Nonacqui­

escence” signifies that, although no fur­

ther review was sought, the Service does

not agree with the hold­ing of the court

and, generally, will not follow the deci­

sion in disposing of cases involving other

taxpayers. In reference to an opinion of a

circuit court of appeals, a “nonacquies­

cence” indicates that the Ser­vice will not

follow the holding on a na­tionwide ba­

sis. However, the Service will recognize

the precedential impact of the opinion on

cases arising within the venue of the de­

ciding circuit.

The Commissioner DOES NOT AC­

QUIESCE in the following decision:

Complex Media, Inc. v. Commissioner, T.C. Memo. 2021-141

Issue 1:

Nonacquiescence to the court’s conclusion that the parties’ failure to report the transactions fully or consistently should not be a major factor in a decision whether to allow a taxpayer to

disavow the form of its transactions and also to the standard the court applied to allow petitioner to disavow its form in this case.



Issue 2:



Nonacquiescence to the court’s determination that the fair market value of a “Deferred Payment Right” (as described therein) for purposes of section 351(b)(1) is not equal to its issue price.

1



Bulletin No. 2023–11

529

March 13, 2023

Part I

T.D. 9972

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Parts 1, 53, 54,

and 301

Electronic-Filing

Requirements for Specified

Returns and Other

Documents

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulation.

SUMMARY: This document contains

final regulations amending the rules for

filing electronically and affects persons

required to file partnership returns, cor­

porate income tax returns, unrelated busi­

ness income tax returns, withholding tax

returns, certain information returns, regis­

tration statements, disclosure statements,

notifications, actuarial reports, and certain

excise tax returns. The final regulations

reflect changes made by the Taxpayer

First Act (TFA) and are consistent with

the TFA’s emphasis on increasing elec­

tronic filing.

DATES: Effective date: These regulations

are effective on February 23, 2023.

Applicability dates: For dates of applica­

bility, see §§1.1461-1(j), 1.1474-1(j), 1.60334(b), 1.6037-2(b), 1.6045-2(i), 1.6045-4(s),

1.6050I-1(h), 1.6050I-2(f), 1.6050M-1(f),

53.6011-1(e), 54.6011-3(f), 301.1474-1(e),

301.6011-2(g), 301.6011-3(f), 301.6011-5(f),

301.6011-10(c), 301.6011-11(e), 301.601112(f), 301.6011-13(f), 301.6011-14(f),

301.6011-15(f), 301.6012-2(f), 301.60334(d), 301.6037-2(f), 301.6057-3(f), 301.60582(f), 301.6059-2(e), and 301.6721-1(h).

FOR FURTHER INFORMATION

CONTACT: Casey R. Conrad of the Of­

fice of the Associate Chief Counsel (Pro­

March 13, 2023

cedure and Administration), (202) 3176844 (not a toll-free number). The phone

number above may also be reached by in­

dividuals who are deaf or hard of hearing

or who have speech disabilities through

the Federal Relay Service toll-free at

(800) 877-8339.

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments to

the Regulations on Income Taxes (26 CFR

part 1) under sections 1461 and 1474 of

the Internal Revenue Code (Code), which

provide that persons required to deduct

and withhold tax are liable for such tax;

under sections 6045 and 6050M of the

Code, which require persons to file and

furnish certain information with respect to

transactions and contracts; and under sec­

tion 6050I of the Code, which requires per­

sons to report information about financial

transactions to the IRS; to the Regulations

on Pension Excise Taxes (26 CFR part 54)

under section 6011 of the Code, which

requires persons to report information for

certain excise taxes related to employee

benefit plans; to the Regulations on Foun­

dation and Similar Excise Taxes (26 CFR

part 53) under section 6011 of the Code to

remove the option—available to a person

required to report certain excise taxes on

Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code—to designate a Form

4720 filed by a private foundation or trust

as that person’s return if the foundation is

reporting the same transaction; and to the

Regulations on Procedure and Adminis­

tration (26 CFR part 301) under sections

1474, 6011, 6012, 6033, 6057, 6058, and

6059 of the Code for determining whether

returns must be filed using magnetic me­

dia (references to ‘‘electronic form’’ are

used in place of ‘‘magnetic media’’).

On July 1, 2019, the President signed

into law the TFA, Public Law 116-25,

133 Stat. 981 (2019). Section 2301 of the

TFA amended section 6011(e) by add­

ing new paragraph 5 that authorizes the

Secretary of the Treasury or her delegate

(Secretary) to prescribe regulations that

530

decrease, in accordance with the TFA,

the number of returns a taxpayer may file

without being required to file electroni­

cally. Section 3101 of the TFA amended

section 6011 to require any charitable or

other organization required to file an an­

nual return that relates to any tax imposed

by section 511 on unrelated business tax­

able income to file those returns in elec­

tronic form. Section 3101 of the TFA also

amended section 6033 to require any or­

ganization required to file a return under

section 6033 to file those returns in elec­

tronic form.

On July 23, 2021, the Department of

the Treasury (Treasury Department) and

the IRS published a notice of proposed

rulemaking (NPRM) (REG-102951-16)

in the Federal Register (86 FR 39910),

providing guidance on the electronic-fil­

ing rules for partnership returns, corporate

income tax returns, unrelated business

income tax returns, withholding tax re­

turns, certain information returns, regis­

tration statements, disclosure statements,

notifications, actuarial reports, and certain

excise tax returns. The 2021 proposed

regulations also withdrew the proposed

regulations published in the Federal

Register on May 31, 2018, amending the

rules for determining whether information

returns must be filed electronically. The

2018 and 2021 proposed regulations are

included in the rulemaking docket for this

Treasury Decision on www.regulations.

gov.

Summary of Comments and

Explanation of Revisions

The Treasury Department and the IRS

received 22 comments in response to the

proposed regulations. All comments were

considered and are available at www.regulations.gov or upon request. A public

hearing was held on September 22, 2021.

Three commenters testified at the public

hearing. The comments that are within the

scope of the regulations are summarized

and discussed in this preamble.

After consideration of the comments,

the Treasury Department and the IRS

adopt the proposed regulations as revised

by this Treasury Decision. To the extent

Bulletin No. 2023–11

not inconsistent with the Summary of

Comments and Explanation of Revisions

section of this preamble, the Explanation

of Provisions section of the preamble to

the proposed regulations is incorporated

in this document.

I. The Applicability Date of the Final

Regulations

A. Applicable for Returns Required to be

Filed in 2024

In general, the proposed regulations

provide that the amended electronic-fil­

ing rules would be applicable to returns

required to be filed during calendar years

beginning after the date of publication of

the Treasury Decision in the Federal Register. The proposed regulations provide

for other applicability dates depending

on the filing requirements for specific tax

forms. For example, the proposed regula­

tions provide that the changes to the elec­

tronic-filing rules would apply to returns

required to be filed under §301.6058-2 for

plan years that begin on or after January

1, 2022, but only for filings with a filing

deadline (not taking into account exten­

sions) after July 31, 2022.

The majority of commenters recom­

mended delaying the applicability of the

proposed changes by at least one calendar

year to provide time for their customers to

adjust inventories; for software companies

to adjust their programming; for paper

filers and the IRS to adjust their process­

es; and for the IRS to communicate the

changes to the public. One commenter, a

manufacturer and supplier of tax forms,

expressed concern that the timing of the

proposed changes would impose financial

burdens on their customers, buyers, and

resellers of tax forms, because planning

and purchasing inventory had already be­

gun when the proposed regulations were

published. That commenter also was con­

cerned that those filers needing a Trans­

mitter Control Code (TCC), required for

electronically filing most information

returns, would not be able to obtain one

for the 2022 filing season, because appli­

cations for a TCC were due by November

1, 2021. Another commenter, a seller of

paper forms, similarly noted that demand

for paper tax forms generally begins long

before the filing season starts, and that tax

Bulletin No. 2023–11

professionals and suppliers had already

begun ordering and shipping paper tax

forms for the 2022 filing season before

the proposed regulations were published.

The commenters also asserted that chang­

es in the electronic-filing rules made near

the start of filing season have a substantial

impact on tax-software companies that

must adjust their systems to comply with

the changes.

Other commenters supported the

IRS’s efforts to modernize the return-fil­

ing process to require withholding agents

to electronically file Form 1042, Annual Withholding Tax Return for U.S.

Source Income of Foreign Persons, and

shared the IRS’s desire to improve the

timeliness and accuracy of refunds and

credits claimed by foreign persons with

amounts withheld. But they suggested

that the IRS delay the applicability date

of the proposed changes by at least one

calendar year to provide time for the IRS

and withholding agents to prepare for the

electronic filing of Forms 1042. They

requested that the IRS provide electron­

ic-filing specifications for Forms 1042 as

soon as possible, and once provided, al­

low additional time to create and test the

required software.

The Treasury Department and the IRS

understand the concerns raised by com­

menters with respect to applicability dates

of the regulations contained in this Trea­

sury Decision. The Treasury Department

and the IRS believe that making the new

provisions for electronic filing applicable

to returns and other documents required

to be filed during calendar year 2024

will give affected persons ample time to

prepare. Accordingly, final regulations

§§1.1461-1(j), 1.1474-1(j), 1.6037-2(b),

1.6045-2(i), 1.6045-4(s), 1.6050I-1(h),

1.6050I-2(f), 1.6050M-1(f)(4), 54.60113(f), 301.1474-1(e), 301.6011-2(g)(1),

301.6011-3(f), 301.6011-5(f), 301.601111(e),

301.6011-12(f),

301.601113(f), 301.6011-14(f), 301.6011-15(f),

301.6012-2(f),

301.6037-2(f),

and

301.6721-1(h) provide that the new pro­

visions for electronic filing will apply

for returns and other documents required

to be filed during calendar year 2024.

Sections 301.6057-3(f), 301.6058-2(f),

301.6059-2(e) provide that the new pro­

visions for electronic filing will apply for

plan years that begin on or after January

531

1, 2024. To avoid partial retroactive effect

with respect to certain non-calendar-year

taxpayers, final regulations §§301.601112(f), 301.6011-13(f), and 301.6012-2(f)

specify that these provisions apply to

returns required to be filed for taxable

years ending on or after December 31,

2023. In light of the applicability dates,

the language “but only for filings with a

filing deadline (not taking into account

extensions) after July 31, 2022” that was

included in proposed §§301.6057-3(f),

301.6058-2(f), and 301.6059-2(e) has

been removed from the final regulations.

B. Applicability date for forms under

section 3101 of the TFA

Section 3101 of the TFA amended

section 6011 of the Code to require any

organization required to file an annual re­

turn that relates to any tax imposed by sec­

tion 511 on unrelated business taxable in­

come to file the return in electronic form.

Section 3101 of the TFA also amended

section 6033 to require any organization

required to file a return under section 6033

to file the return in electronic form. Unlike

section 2301 of the TFA, the provisions in

section 3101 of the TFA are self-executing

and generally apply to taxable years begin­

ning after July 1, 2019, in accordance with

section 3101(d) of the TFA. The applica­

bility date of final regulations §§1.60334(b), 53.6011-1(e), 301.6011-10(c), and

301.6033-4(d) (returns required to be filed

during calendar years beginning after the

date of publication of the Treasury Deci­

sion in the Federal Register) does not af­

fect the requirements under section 3101

of the TFA.

II. The Electronic-Filing Rules for

Information Returns

A. The electronic-filing threshold

Proposed §301.6011-2(b) and (c) pro­

vide that if a person is required to file,

during calendar year 2022, a total of at

least 100 information returns covered by

§301.6011-2(b)(1) and (2), and during

calendar years 2023 and after, a total of

at least 10 such returns, the person is re­

quired to file those information returns

electronically (electronic-filing threshold

for information returns). Because these

March 13, 2023

final regulations are not applicable until

calendar year 2024, the proposed elec­

tronic-filing thresholds of 100 for returns

required to be filed in calendar year 2022,

and 10 returns for returns required to be

filed in calendar year 2023 are not adopt­

ed. The electronic-filing threshold for re­

turns required to be filed in calendar years

2022 and 2023 remains at 250. The final

regulations adopt, however, the proposed

electronic-filing threshold of 10 for re­

turns required to be filed on or after Jan­

uary 1, 2024, as authorized by Congress’s

enactment of section 2301 of the TFA.

Two commenters disagreed with the

proposed reduction to 10 returns for small

businesses. Both questioned the need for

an electronic-filing rule at all and suggest­

ed that businesses should be afforded flex­

ibility in how they file their returns, rather

than be required to file returns electroni­

cally when they have filed paper returns

for years. The first commenter supported

the proposed reduction of the electron­

ic-filing threshold for information returns

from 250 to 100 returns but disagreed

with the proposed reduction to 10 returns

because it was “unnecessary and lacks

empathy for the challenges facing small

businesses.” The second believed that any

reduction to the electronic-filing threshold

should be a small, gradual reduction and

added that some small businesses have lit­

tle to no understanding of the Internet and

requiring these filers to electronically file

their returns would be challenging.

The Treasury Department and the IRS

disagree with the commenters’ suggestions

because electronic filing has become more

common, accessible, and economical, as

evidenced by the prevalence of tax-return

preparers and third-party service provid­

ers who offer return-preparation and elec­

tronic-filing services; by the availability

of tax-return-preparation software; and

by the numbers of returns already being

filed electronically on a voluntary basis.

Although the Treasury Department and

the IRS understand that these changes to

the electronic-filing requirements may

constitute a burden in the short term for

some filers, the final regulations do not

adopt these comments. To address any

undue hardship that these changes to the

electronic-filing rules may have on certain

small businesses that are paper informa­

tion-return filers, the IRS will continue to

March 13, 2023

grant hardship waivers fairly and consis­

tently and to grant reasonable-cause relief

from penalties for failure to file returns

electronically in appropriate cases. Ad­

ditionally, the Treasury Department and

the IRS expect the administrative costs

to electronically file returns to be further

reduced for taxable year 2022 and later

years with the launch of the Information

Returns Intake System (IRIS) Taxpayer

Portal, an internet platform for Form 1099

filings.

B. Filing corrected information returns in

same manner as originals

Proposed §301.6011-2(c)(4)(ii) pro­

vides a rule for the manner of filing cor­

rected returns. Proposed §301.6011-2(c)

(4)(ii)(A) provides that if a person is re­

quired to file original information returns

electronically, that person must file any

corresponding corrected information re­

turns electronically. Proposed §301.60112(c)(4)(ii)(B) provides that, if a person is

permitted to file information returns on

paper and does file those information re­

turns on paper, that person must also file

any corresponding corrected information

returns on paper.

One commenter generally supported

the corrected-return rule, but expressed

concern that the rule could occasionally

be an inconvenience to some people or

that an intervening event could occur that

would require filers to change their meth­

od of filing. Two other commenters noted

that the corrected-return rule would add an

additional burden on filers because many

software options provide electronic filing

of original returns but not corrected ones.

One of these commenters recommend­

ed that the Treasury Department and the

IRS delay requiring filers to correct their

electronically-filed returns electronically

until the IRS has a platform in place (for

example, the internet platform for Form

1099 filings required by section 2102 of

the TFA) that will accept corrected infor­

mation returns online. Another comment­

er opined that the IRS should not require

corrected returns to be filed in a particular

manner, but should instead “encourage the

most efficient way to serve the majority

better.”

The final regulations do not adopt

these comments. The Treasury Depart­

532

ment and the IRS have determined that,

because of the disparate procedures for

processing paper and electronic infor­

mation returns, the corrected-return rule

will increase the IRS’s timeliness and ac­

curacy in processing information returns,

which will improve tax administration

with respect to corrected returns. The

Treasury Department and the IRS expect

that the number of software options pro­

viding electronic filing for corrected re­

turns will increase to meet that expected

increase in demand. The IRS will work

with the tax-software community to en­

courage them to develop software op­

tions for corrections. If an intervening

event or the cost to purchase electron­

ic-filing software for corrected informa­

tion returns would cause a filer undue

hardship, the filer may request a waiver

from the electronic-filing requirement

for the corrected information returns. As

discussed in this preamble, the changes

to the information return electronic-filing

rules, including the corrected-return rule,

in this Treasury Decision will apply for

returns required to be filed after Decem­

ber 31, 2023, which is after the launch of

the Form 1099 filing platform. See sec­

tion I.A. Applicable for Returns Required

to be Filed in 2024.

C. TCC issues for non-United States

(U.S.) filers

The proposed regulations would in­

crease the number of non-U.S. filers

required to electronically file their in­

formation returns. On July 26, 2021, the

IRS announced changes to the proce­

dures for filers to authenticate their iden­

tities to create an account to apply for a

TCC, which is required to electronically

file most information returns. See FIRE

System Update: Improving the Process

and Security for Information Return (IR)

Application for Transmitter Control Code

(TCC), IRS (Oct. 1, 2021), https://www.

irs.gov/tax-professionals/fire-system-update-improving-the-process-and-security-for-information-return-ir-application-for-transmitter-control-code-tcc (last

visited January 13, 2023).

Several commenters expressed con­

cern with the changes to the authentica­

tion identity-proofing procedures. One

commenter mentioned that a significant

Bulletin No. 2023–11

number of qualified intermediaries and

foreign filers would not be able to elec­

tronically file information returns, such

as Forms 1042-S, Foreign Person’s U.S.

Source Income Subject to Withholding,

and 1099, because the new authentication

procedures require users to have U.S.based information, such as a U.S. Tax­

payer Identification Number, U.S. tele­

phone number, or U.S. financial account,

to authenticate their identity before ob­

taining a TCC. Two other commenters

expressed similar concerns with respect

to all non-U.S. filers, specifically noting

that due to client confidentiality and re­

lated issues, it is not feasible to require

non-U.S. filers to engage third parties to

file returns on their behalf. Two of the

commenters recommended the IRS ex­

clude qualified intermediaries and other

non-U.S. filers from the secure authen­

tication identity-proofing procedures to

ensure they can continue to submit their

information returns electronically. The

other commenters recommended that the

IRS, without compromising the security

objectives, make accommodations for

foreign filers so they can continue to file

their information returns electronically.

The Treasury Department and the IRS

are aware of this authentication issue for

non-U.S. filers, but the final regulations

do not adopt the suggestion to provide a

blanket electronic-filing exemption for

non-U.S. filers. The IRS’s preferred ap­

proach, in light of the TFA’s emphasis to

increase electronic filing, is to develop

alternative authentication requirements

for identity proofing in accordance with

standards set forth by the U.S. Department

of Commerce, National Institute of Stan­

dards and Technology (NIST). The IRS is

thus actively working to develop updated

authentication procedures for non-U.S. fil­

ers that comply with the NIST standards

and will inform the public in subsequent

guidance or public pronouncement when

these procedures become available.

D. Form 1042-S issues

Proposed §301.6011-2(b)(1) includes

Form 1042-S in the list of information

returns covered by the electronic-fil­

ing rules set forth in that regulation.

Form 1042-S has been included in the

regulation since 1986. The proposed reg­

Bulletin No. 2023–11

ulation, however, counts all the informa­

tion returns in the aggregate to determine

if the filer must electronically file. In ad­

dition, the proposed regulation decreases

the number of information returns that

can be filed on paper from 250 to 10, for

returns required to be filed in calendar

year 2023 and after. Two commenters

requested that the Treasury Department

and the IRS remove Form 1042-S en­

tirely from the list of returns included in

the proposed regulations because of the

changes to Form 1042-S since 2013. For

example, the 2013 Form 1042-S code

for “other income” was income code

50, but the “other income” code was lat­

er changed to income code 23. The two

commenters opined that changes to these

codes could confuse filers and recipi­

ents of the form, and that updating the

software to address these changes could

present challenges to software providers.

One of the commenters stated that the

proposed regulations would dispropor­

tionately affect occasional and low-vol­

ume filers of the Form 1042-S who may

not have sufficient resources to com­

ply with the proposed regulations. Both

commenters opined that, if Form 1042-S

is removed from the aggregation rule, the

IRS would not need as many resources to

deal with improper filing errors and re­

quests for a waiver from electronic filing

for Forms 1042-S.

The final regulations do not adopt

these comments. Although Form 1042S underwent several changes for taxable

year 2014 to accommodate reporting of

payments and amounts withheld under

the provisions of the Foreign Account

Tax Compliance Act, the form has not un­

dergone a large number of changes since

then. For example, the 2022 Form 1042S added to the form four new codes, but

each was assigned a completely new num­

ber that was not previously listed on the

2021 Form 1042-S. Absent extraordinary

circumstances, such as relevant statutory

changes, no substantial changes to the in­

come codes on Form 1042-S are expected

at this time. To the extent, however, that

taxpayers receiving Forms 1042-S have

questions about how to report the infor­

mation, the IRS updates the Instructions

for Form 1042-S and the instructions for

income tax returns each year so that tax­

payers will have the most up-to-date in­

533

formation. Finally, the Treasury Depart­

ment and the IRS have determined that the

benefits to be gained in the form of faster

and more accurate return processing out­

weigh any concerns about IRS resources

needed in processing electronic-filing

waiver requests.

III. Waiver and Exemptions

As described in the preamble to the

proposed regulations, many of the regu­

lations imposing electronic-filing require­

ments also provide a waiver from elec­

tronic filing to any person who establishes

undue hardship. The Treasury Department

and the IRS specifically requested com­

ments on how the hardship-waiver proce­

dures should be administered, including

suggestions for revising the procedures

for requesting, and criteria for granting,

a hardship waiver, and received several

comments in response.

A. Cost concerns

One commenter generally supported

the proposed rules, noting that electronic

filing not only significantly reduces paper

waste but also is faster and more reliable

than paper filings, which can get lost in the

mail. Another commenter agreed that all

persons should “get on board with the dig­

ital age of tax record keeping and filing,”

but commented that new small businesses

with little resources and businesses that

have paper filed for years may not want to

file electronically or may not know how.

Both commenters expressed concern over

the cost of electronic filing, suggesting

that the IRS waive all or part of the cost

for low-income taxpayers and others ex­

periencing financial hardship.

The final regulations do not adopt these

comments. The preamble to the proposed

regulations describes the recent reduction

in costs to electronically file and the sig­

nificant benefits of moving to electronic

filing. To address any undue hardship on

certain small businesses arising from these

changes to the electronic-filing rules, the

Treasury Department and the IRS will

continue to administer the hardship-waiv­

er program fairly and consistently and to

grant reasonable-cause relief from penal­

ties for failure to file returns electronically

in appropriate cases.

March 13, 2023

B. General waiver and exemption

procedures

Three commenters expressed concern

that, unless the IRS provides adminis­

trative exemptions or hardship waivers,

the proposed regulations under sec­

tion 6011(e) would impose burdens upon

discrete populations including, for exam­

ple, members of certain religious commu­

nities; remote populations; and elderly in­

dividuals without adequate technological

literacy.

With respect to religious communi­

ties, the commenters noted that members

of certain religious communities, in ac­

cordance with their religious practices,

generally do not use technology and have

tenets and teachings that prohibit commu­

nity members from having internet access

or the technology required to electronical­

ly file tax returns. The commenters thus

expressed concern that the reduction of

the electronic-filing threshold to 10 re­

turns with respect to information returns,

partnership returns, corporate income tax

returns, and electing small business in­

come tax returns would now require many

small business owners who are members

of these religious communities to file

these returns electronically, in violation of

their religious practices. The commenters

recommended two alternative changes to

the waiver procedures: that the Treasury

Department and the IRS expand the cur­

rent waiver request form, Form 8508, Request for Waiver From Filing Information

Returns Electronically, to include either

a one-time or an annual application for

exemption from electronic-filing require­

ments, based on religious beliefs, for any

form the filer is required to file electroni­

cally; or that a new form be created, sim­

ilar to Form 8948, Preparer Explanation

for Not Filing Electronically, that could

be attached to the paper-filed return to

explain that the filer was filing on paper

because of religious beliefs.

The Treasury Department and the IRS

agree that filers for whom using the tech­

nology required to file in electronic form

conflicts with their religious beliefs should

be granted administrative exemptions

from the electronic-filing requirements

for information returns under §301.60112; partnership returns under §301.60113; corporate income tax returns under

March 13, 2023

§301.6011-5; electing small business

income tax returns under §301.6037-2;

and other returns and statements that the

IRS determines appropriate. To that end,

final regulations §§301.6011-2(c)(6)(ii);

301.6011-3(b)(2); 301.6011-5(b)(2); and

301.6037-2(b)(2) provide that an exemp­

tion will be allowed for filers for whom us­

ing the technology required to file in elec­

tronic form conflicts with their religious

beliefs. Additionally, except as described

in section III.C. of this preamble, the final

regulations authorize the Commissioner

to provide exemptions from the electron­

ic-filing requirements to promote effective

and efficient tax administration. Finally,

these final regulations clarify that a sub­

mission claiming an exemption should be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

posting to the IRS.gov website. In gen­

eral, exemptions will be made available

on a form-by-form basis rather than on a

per-filer basis to allow the IRS to appro­

priately address differences in filing re­

quirements and filer populations.

With respect to remote populations,

one of the commenters expressed concern

that many Native tribes, such as Native

Alaskan tribes, lack access to Internet and

computers and that the reduction of the

electronic-filing threshold for informa­

tion returns would impact some of these

Native Alaskans, for example, a com­

mercial fishing captain. This commenter

also stated that a disproportionate number

of Americans in business age 65 or old­

er may lack the ability or accessibility

to electronically file tax returns and that

the cost for these older taxpayers to pay

a third party to electronically file could

force them out of business. The comment­

er asked whether factors other than finan­

cial cost, such as a filer’s lack of access to

digital technology or a filer’s age, are fac­

tored into the IRS’s decision on whether

to grant a waiver request. The commenter

further expressed concern that granting a

hardship waiver is discretionary and that

the procedures do not include an objective

threshold or standard on how much the

cost to electronically file must exceed the

cost to paper file for the IRS to grant an

electronic-filing waiver. The commenter

thus recommended that the Treasury De­

partment and the IRS expand or clarify

534

that the hardship-waiver procedures to in­

clude Native tribes and other persons with

difficulty accessing or using technology.

The Treasury Department and the IRS

expect rural filers without access to inter­

net and older filers that lack digital literacy

to make good faith efforts to comply with

the electronic-filing requirements of these

regulations, which may require obtaining

additional assistance to electronically file.

To the extent the burden of obtaining the

necessary assistance to file returns would

cause undue hardship, the filers may sub­

mit a hardship-waiver request from the

electronic-filing requirements.

Under section 6011(e)(2)(B) of the

Code, the IRS must consider (among oth­

er relevant factors) the taxpayer’s ability

to comply at a reasonable cost with the

requirements of such regulations. To de­

termine whether a taxpayer can comply

with the electronic-filing requirements

at a reasonable cost, the IRS requires the

taxpayer to provide two estimates of the

cost that the taxpayer would incur to con­

vert to electronic filing. Financial cost,

however, is not the only factor that the

IRS may consider. Under current proce­

dures, for example, the IRS will consider

granting a waiver from the electronic-fil­

ing requirements for information returns

covered under §301.6011-2(b) if a fire,

casualty, or natural disaster affected the

operation of the business. The proposed

hardship-waiver language, for example in

proposed §301.6011-2(c)(6)(i), provides

that “[t]he principal factor in determin­

ing hardship will be the amount, if any,

by which the cost of filing the return elec­

tronically in accordance with this section

exceeds the cost of filing the return on

paper.” Because the IRS takes other fac­

tors into consideration when analyzing a

request for a waiver from electronic-fil­

ing requirements, the final regulations are

modified to read, “One principal factor in

determining hardship will be the amount,

if any, by which the cost of filing the re­

turn electronically in accordance with this

section exceeds the cost of filing the re­

turn on paper.” The Treasury Department

and the IRS anticipate that additional

details on the specific hardship-waiv­

er procedures for each form affected by

this Treasury Decision will be included

in future public releases of IRS forms

and instructions. After considering pub­

Bulletin No. 2023–11

lic comments, the IRS revised the Form

8508 in January 2023 to clarify the cir­

cumstances the IRS may accept to justi­

fy a waiver from the e-filing requirement

for the information returns listed on the

Form, including hardships other than fi­

nancial hardship. The Treasury Depart­

ment and the IRS have thus determined

that the IRS’s current hardship-waiver

procedures provide appropriate relief to

rural and older taxpayers from any undue

burdens arising from these changes to the

electronic-filing rules. Reasonable cause

relief from penalties may also be avail­

able for these filers.

The final regulations also clarify that,

if the IRS’s systems do not support elec­

tronic filing for a specific return required

to be filed electronically with the IRS, a

taxpayer will not be required to file the

return electronically. Several of the final

regulations require the electronic filing of

returns that were previously filed on paper

only. If the IRS’s systems do not have the

capacity to accept a particular type of re­

turn electronically when the electronic-fil­

ing requirements become applicable, this

provision clarifies that a taxpayer will not

be required to file that type of return elec­

tronically. In such situations, a taxpayer

will not be required to submit a request

for a hardship waiver to file that type of

return on paper.

Finally, one of the commenters ex­

pressed concern with the statement in the

proposed regulations that “a request for a

hardship waiver must be made in accor­

dance with postings, guidance, forms or

instructions, including those on the IRS.

gov website” because these discrete pop­

ulations, without access to the website,

might not have the latest guidance post­

ed to the website, and so might be filing a

hardship-waiver request based on outdat­

ed guidance from paper forms and instruc­

tions. The commenter thus recommended

that the IRS be lenient in imposing penal­

ties on taxpayers of faiths who avoid tech­

nology, filers that lack access to technolo­

gy, and older Americans who in good faith

request a hardship waiver in compliance

with outdated guidance.

The Treasury Department and the IRS

have determined that to the extent that a

taxpayer can show reasonable cause for

failure to file electronically, including val­

id impediments to making a proper waiver

Bulletin No. 2023–11

request, the penalty for failure to file will

not apply.

C. Exceptions to general waiver and

exemption procedures

The final regulations do not provide

for waivers and exemptions in all circum­

stances or for all tax forms required to be

electronically filed.

1. Returns required under section 3101 of

the TFA

Section 3101 of the TFA sets forth two

requirements for mandatory electronic

filing by tax-exempt organizations: under

new section 6011(h), organizations with

returns relating to any tax imposed under

section 511 on unrelated business taxable

income “shall file such return in electron­

ic form,” and under new section 6033(n),

organizations with returns required to be

filed under section 6033 “shall file such

return in electronic form.” Thus, the TFA

amendments expand the class of forms

that tax-exempt entities are currently re­

quired to file electronically, such as the

Form 990-N, Electronic Notice (e-Postcard), and Form 8871, Political Organization Notice of Section 527 Status.

Section 3101 of the TFA states that

organizations required to file a return un­

der sections 6011(h) or 6033(n) “shall”

file such return in electronic form and

does not provide for any waiver or alter­

native method to meet the electronic-fil­

ing requirements. The legislative history

to section 3101 of the TFA explains that

mandatory electronic filing by all tax-ex­

empt organizations required to file returns

will improve efficiency, reduce costs, and

generally improve oversight of tax-ex­

empt organizations. H. Rep. No. 116-39,

at 97-98 (2019). Section 3101 of the TFA

also amended section 6104(b) to provide

that “[a]ny annual return required to be

filed electronically under section 6033(n)

shall be made available by the Secretary

to the public as soon as practicable in a

machine-readable format.” The legislative

history explains that it is important to in­

crease the transparency of, and enhance

public access to, information about tax-ex­

empt organizations, particularly charitable

organizations. Id. The legislative history

further explains that this will expedite the

535

publication of the information required to

be disclosed by the IRS and will enhance

its usability by stakeholders attempting

to exercise oversight of tax-exempt orga­

nizations. Id. Such stakeholders include

not only members of the public who may

support or donate to an organization, but

also state and local officials charged with

oversight responsibilities and responsibil­

ity for prosecuting fraudulent charities.

In contrast to forms affected by section

2301 of the TFA, there is no requirement

that an alternate paper filing process be

provided for certain filers of forms af­

fected by section 3101 of the TFA (such

as for filers filing fewer than 10 returns).

Further, in contrast to forms affected by

section 2301 of the TFA, information re­

turns affected by section 3101 of the TFA

are required to be released to the public

in machine-readable format under section

6104(b), a process that would be ham­

pered if the IRS were required to accept

paper returns and frustrate the intent of

Congress to expedite the publication of

those returns. Proposed §§301.6011-10

and 301.6033-4, consistent with the statu­

tory mandate to require all forms affected

by section 3101 of the TFA to be electron­

ically filed, did not provide for any waiv­

er or exemption from the electronic filing

requirements.

While public comments generally re­

questing waivers or exemptions from

the electronic filing requirements under

certain circumstances were received,

§§301.6011-10 and 301.6033-4 are final­

ized without waiver or exemption provi­

sions because providing a waiver or ex­

emption provision would be contrary to

the plain language of section 3101 of the

TFA and inconsistent with the legislative

history to that section. Notwithstanding

that, the Religious Freedom Restoration

Act of 1993, Public Law 103-141 (107

Stat. 1488), may provide an exemption

for any filer for whom using the technolo­

gy required to file electronically conflicts

with their religious beliefs.

2. Qualified plan returns filed through

EFAST2

On July 21, 2006, the Department of

Labor (DOL) published a final rule in the

Federal Register (71 FR 41359), requir­

ing electronic filing of the Form 5500,

March 13, 2023

Annual Return/Report of Employee Benefit Plan, and Form 5500-SF, Short Form

Annual Return/Report of Small Employee

Benefit Plan, for plans covered by Title I

of the Employee Retirement Income Se­

curity Act, Public Law 93-406 (88 Stat.

854), as amended (ERISA) for plan years

beginning on or after January 1, 2008. On

November 16, 2007, the DOL published

a final rule in the Federal Register (72

FR 64710), postponing the effective date

of the electronic filing mandate so that the

mandate applies to plan years beginning

on or after January 1, 2009. See 29 CFR

§2520.104a-2.

Filers of the Form 5500 and Form

5500-SF are required to file electronical­

ly through DOL’s computerized ERISA

Filing Acceptance System (EFAST2).

Rev. Proc. 2015-47, 2015-39 IRB 419,

sets forth procedures to request a waiver

of the electronic-filing requirement due to

economic hardship for plan administrators

of retirement plans (or, in certain situa­

tions, employers maintaining retirement

plans) that are required to file electronical­

ly certain employee benefit plan returns.

Section 3 of Rev. Proc. 2015-47 provides

that, because filers of Form 5500 and

Form 5500-SF are required to file those

returns electronically through DOL’s

EFAST2, a waiver of the electronic-fil­

ing requirement for those forms will not

be granted. Because an actuarial report

required under section 6059 is filed with

Form 5500 or Form 5500-SF as a schedule

and is also required to be filed electron­

ically through DOL’s EFAST2, a waiver

of the electronic-filing requirement for the

actuarial report also will not be granted.

Sections 301.6058-2 and 301.6059-2 of

the final regulations continue to provide

that the Commissioner may waive the

electronic-filing requirements under sec­

tions 6058 and 6059 in cases of undue

economic hardship, and that a request

for a waiver must be made in accordance

with applicable IRS revenue procedures,

publications, forms, instructions, or other

guidance, including postings to the IRS.

gov website. However, pursuant to section

3 of Rev. Proc. 2015-47, waivers of the

electronic-filing requirement for Forms

5500 and 5500-SF (and related actuarial

reports) will continue to not be granted.

In addition, §§301.6058-2 and 301.60592 of the final regulations do not provide

March 13, 2023

for any exemptions to the electronic-filing

requirement for Forms 5500 and 5500-SF

(and related actuarial reports) because,

unlike other filings described in this Trea­

sury Decision, Forms 5500 and 5500-SF

(and related actuarial reports) are required

to be filed electronically through DOL’s

EFAST2.

3. Form 8300

If filed electronically, Forms 8300,

Report of Cash Payments Over $10,000

Received in a Trade or Business, are not

filed electronically with the IRS; rather

they are filed electronically through the

Financial Crimes Enforcement Network’s

(FinCEN) BSA E-Filing System. The

Treasury Department, FinCEN, and the

IRS have determined that most Form 8300

filers who might have difficulty filing

electronically and might therefore need

a waiver, would likely not be required to

file electronically in the first place because

they would not meet the electronic-filing

threshold in §301.6011-2(c), even after

that threshold is reduced to 10 returns. See

section II.A. Accordingly, the Treasury

Department, FinCEN, and the IRS have

determined that there is no need for a sep­

arate waiver process for Form 8300 filers.

Instead, Form 8300 filers who request and

receive a waiver under §301.6011-2(c)

for any return required to be filed under

§301.6011-2(b)(1) or (2) will automati­

cally be deemed to have received an elec­

tronic-filing waiver for any Forms 8300

the filer is required to file for the duration

of the calendar year.

IV. Form 1042 Substantiation

Requirements to Claim Credit on Line 67

Proposed

§§301.1474-1(a)

and

301.6011-15(a) would require certain

filers to electronically file Forms 1042.

Forms 1042 have previously been filed

only on paper. For Form 1042 filers that

claim a credit on line 67 for taxes with­

held by other withholding agents, the fil­

ers substantiate this credit by attaching, to

the Form 1042, paper copies of the Forms

1042-S they received from those other

withholding agents.

In light of the electronic-filing require­

ments for Form 1042, two commenters

requested the IRS remove the requirement

536

to provide paper copies of Forms 1042-S

to support the claim made on line 67 of

the Form 1042, suggesting that the IRS

would already have electronic copies of

the Forms 1042-S filed by the other with­

holding agents, making the requirement

duplicative.

The final regulations do not adopt these

comments as they are outside the scope of

these regulations, which do not impose

the requirement to provide paper copies.

Nonetheless, the IRS is actively working

to develop programming that would allow

filers to electronically attach or submit

Forms 1042-S with their Forms 1042 to

substantiate their claimed credit on Line

67. The IRS expects to have programming

in place consistent with the applicability

dates in these final regulations.

V. Regulatory Flexibility Act Certification

One commenter expressed concern

that, although the proposed regulations

certify that they will not have a significant

economic impact on a substantial number

of small entities for purposes of the Regu­

latory Flexibility Act, the regulations will

in fact have a “significant economic im­

pact” on small entities.

The Treasury Department and the IRS

maintain their certification that the final

rules will not have a significant economic

impact on a substantial number of small

entities for the reasons discussed in sub­

section II, Regulatory Flexibility Act, of

the following Special Analyses section of

this preamble.

VI. Clarification on a Failure to File

Electronically When Required

The proposed regulations provide that

if a filer fails to file a return or report elec­

tronically when required to do so by the

regulations, the filer is “deemed” to have

failed to file the return or report. The word

“deemed” is superfluous because a tax­

payer who fails to file electronically when

required to do so by these regulations has

failed to file. Therefore, for sake of clar­

ification, the Treasury Department and

the IRS have made minor edits to remove

the word deemed from final regulations

§§54.6011-3(c), 301.1474-1(c), 301.601110(b),

301.6011-12(c),

301.601113(c), 301.6011-14(c), 301.6011-15(c),

Bulletin No. 2023–11

301.6012-2(c),

301.6033-4(b),

301.6721-1(a)(2)(ii).

and

VII. Clarification on 10-Return

Calculation for Material Advisor

Disclosure Statements

Under section 6111 and §301.6111-3(a)

and (e), each material advisor is required

to file a Form 8918, Material Advisor Disclosure Statement, with respect to any re­

portable transaction by the last day of the

month that follows the end of the calendar

quarter in which the advisor became a ma­

terial advisor with respect to the reportable

transaction or in which the circumstances

necessitating an amended disclosure state­

ment occur. Thus, a material advisor may

not know the number of Forms 8918 it will

be required to file during a calendar year

until after the end of the third quarter of

the calendar year. On the other hand, oth­

er returns—for example, Forms 1099, in­

come tax returns, employment tax returns,

and excise tax returns–have fixed due dates

by which those returns must be filed each

calendar year. A filer of those returns will

therefore know at the beginning of the

calendar year whether the filer is required

to file at least 10 returns of those types.

Thus, the Treasury Department and the

IRS clarify in these final regulations that

a material advisor will be required to file

its Forms 8918 electronically or in other

machine-readable form in accordance with

revenue procedures, publications, forms,

instructions, or other guidance, including

postings on the IRS.gov website, during the

calendar year only if the material advisor

is required to file at least 10 returns of any

type, other than Forms 8918. This clarifica­

tion will help ensure material advisors un­

derstand early in the calendar year whether

any Forms 8918 must be filed electronical­

ly or in other machine-readable form with­

out complications of being unable to deter­

mine at the beginning of a calendar year the

number of Forms 8918 that may need to be

filed during the calendar year.

Special Analyses

I. Regulatory Planning and Review –

Economic Analysis

Executive Orders 12866 and 13563 di­

rect agencies to assess costs and benefits

Bulletin No. 2023–11

of available regulatory alternatives and, if

regulation is necessary, to select regulato­

ry approaches that maximize net benefits

(including (i) potential economic, envi­

ronmental, and public health and safety

effects, (ii) potential distributive impacts,

and (iii) equity). Executive Order 13563

emphasizes the importance of quanti­

fying both costs and benefits, reducing

costs, harmonizing rules, and promoting

flexibility.

These final regulations have been des­

ignated as subject to review under Exec­

utive Order 12866 pursuant to the Mem­

orandum of Agreement (April 11, 2018)

(MOA) between the Treasury Department

and the Office of Management and Budget

(OMB) regarding review of tax regula­

tions. The Office of Information and Reg­

ulatory Affairs has designated these final

regulations as significant under section

1(b) of the MOA.

A. Background, Need for the Final

Regulations, and Economic Analysis of

Final Regulations

The Tax Equity and Fiscal Responsi­

bility Act of 1982 (TEFRA), Public Law

97–248, (96 Stat. 610), first directed the

Secretary to prescribe regulations for re­

quiring returns to be filed on magnetic

media, a term generally used to refer to

electronic filing at that time. TEFRA pro­

hibited the Secretary from requiring in­

come tax returns of individuals, estates,

and trusts to be filed in a manner other

than on paper forms. In 1998, Congress

amended section 6011(e) of the Code to

prohibit the Secretary from requiring the

electronic filing of a return unless the fil­

er is required to file at least 250 returns

during the calendar year. The Treasury

Department and the IRS subsequently is­

sued regulations that required a person to

file information returns electronically if

that person is required to file 250 or more

information returns in a calendar year.

The regulations provide that the 250-re­

turn threshold applied separately to each

type of information return covered under

the regulations. The Treasury Department

and the IRS also issued regulations that

set a 250-return threshold in determining

whether large corporation tax returns, S

corporation tax returns, and other returns

must be electronically filed.

537

Since 1998, the technology underlying

electronic filing has become much more

widely available, both in the form of tax

return preparation software and electronic

filing services offered by tax return pre­

parers and other service providers. By

2019, over 98.8 percent of information

returns were already being filed electron­

ically. In July of that year, the President

signed into law the Taxpayer First Act

(TFA). The TFA authorizes the Secretary

to prescribe regulations that decrease the

number of returns a filer may file without

being required to file electronically from

250 to 10.

When returns are filed on paper, the

IRS transcribes much of the input data to

electronic format. In some cases, employ­

ees must manually input this data, requir­

ing significant IRS resources to be spent

on otherwise needless processing and

data entry rather than serving taxpayers in

other ways. Manual data entry can cause

delays in the input and retrieval of data,

affecting the timeliness and accuracy of

processing these forms. This can lead to

delays or other disadvantageous outcomes

for taxpayers. In some cases, manual data

entry can cause delays in the information

available for law enforcement and other

users to detect potential money launder­

ing, terrorist financing, and other tax and

financial fraud. Moreover, the increased

accuracy of the data received from elec­

tronic filing reduces transcription errors

and the cost for the IRS and taxpayers to

resolve these errors.

These final regulations impose elec­

tronic-filing requirements on persons re­

quired to file certain returns, including

partnership returns, corporate income

tax returns, unrelated business income

tax returns, withholding tax returns, and

certain information returns, registration

statements, disclosure statements, notifi­

cations, actuarial reports, and certain ex­

cise tax returns. Specifically, the final reg­

ulations reduce the 250-return threshold

enacted in 1998 to the 10-return threshold

provided by the TFA. Under current reg­

ulations, the 250-return threshold applies

separately to each type of information

return covered under the regulations. The

final regulations require filers to aggregate

across returns types to determine whether

a filer meets the 10-return threshold and is

thus required to file electronically.

March 13, 2023

The IRS receives nearly 4 billion infor­ file electronically, resulting in approxi­ gate the need for regulations to further re­

mation returns per year and projects that by mately 39-41 percent of paper information duce the number of paper returns the IRS

2028, it will receive over 5 billion infor­ returns currently filed to be filed electron­ is required to manually process each year.

mation returns each year. See https://www. ically. At the 10-return threshold, the IRS

Because the vast majority of returns

irs.gov/statistics/soi-tax-stats-calendar- is only requiring 13-16 percent of the larg­ subject to these final regulations are al­

year-projections-publication-6961 (last est paper information return filers to file ready filed electronically, the Treasury

visited January 13, 2023). In 2019, the IRS electronically, but this will result in 62-64 Department and the IRS expect that the

received nearly 40 million paper informa­ percent of all outstanding paper informa­ final regulations will not have any mean­

tion returns even though approximately 99 tion returns to be filed electronically.

ingful impact on economic behavior. Elec­

percent of all information returns for that

In 2020, approximately 13 million out tronic filing has become more common,

year were filed electronically.

of 35 million paper information returns accessible, and economical. The table be­

For taxable year 2020, the data shows were filed by filers filing 1-10 returns and low shows recent trends in the electron­

that creating a 50-return threshold would these filers averaged 2.78 returns each. ic-filing rates of tax returns and informa­

require 1-2 percent of the largest paper in­ This means approximately 85 percent of tion returns. Eighty-one percent of all tax

formation return filers to file electronical­ all paper information return filers would returns, including 95 percent of individual

ly, resulting in approximately 23 percent not be subject to the electronic-filing man­ income tax returns, were filed electroni­

of all paper information returns current­ date at a 10-return threshold based on the cally in fiscal year 2020, rising from 68

ly filed to be filed electronically. For the 2020 data, yet nearly two-thirds of all pa­ percent for all tax returns and 87 percent

same year, a 25-return threshold would per information returns would then be re­ for individual income tax returns in 2016.

68 percent

all tax

returns

andto87

for individual

income

tax all

returns

in 2016.

require from

approximately

4-5 for

percent

of the

quired

be percent

filed electronically.

Thus the

Nearly

information

returns submitted

largest paper information return filers to high rate of electronic filing does not ne­ to the IRS were filed electronically.

Nearly all information returns submitted to the IRS were filed electronically.

Fiscal Year

All tax returns

Individual income tax returns

Information returns, excluding forms processd by the Social

Secuirty Administration (Form SSA-1099, Form RRB-1099, and

W-2)

Data source: IRS Publication 6292 and IRS Data Book

2016

68%

87%

2017

70%

88%

2018

71%

88%

2019

73%

90%

2020

81%

95%

99%

99%

99%

99%

100%

In the limited circumstances in which the cost to comply with these electronic-filing

In the limited circumstances in which religious communities for whom using the envelope, re-route the form if need­

the cost to comply with these electron­ the technology required to file in elec­ ed, ensure the return is processable and

requirements would cause undue hardship, many of these regulations provide a waiver from

ic-filing requirements would cause un­ tronic form conflicts with their religious includes a Taxpayer Identification Num­

due hardship, many of these regulations beliefs. An exemption means that filers ber (TIN), and then date stamp the return.

filing. The IRS

grants

requests.

According

provideelectronically

a waiver from electronically

fil­ routinely

do not have

to be meritorious

pre-approved hardship

to paper waiver

This initial

step must

take place within

ing. The IRS routinely grants meritori­ file. Thus, filers that are eligible for an ex­ 30 days of receipt to allow timely corre­

ous hardship

requests.such

According

emption would

withare

thenot

filerlimited

of processable

to thewaiver

regulations,

undue hardship

couldnot

beexperience

caused byadditional

a range ofspondence

factors that

to the regulations, such undue hardship burden under the regulations.

returns to give the filer time to correct the

could be caused by a range of factors

enacting TFA, Congress made clear mistakes and re-file.

to the financial cost that would beInincurred

by the filer. For example, a hardship to comply with

The IRS employee must next review

that are not limited to the financial cost its intention to broaden the requirements

that would be incurred by the filer. For to file returns electronically. However, the return to determine whether it is scan­

thea electronic-filing

apply torequirements

remote populations

limited

online access

andincludes

nable

or non-scannable,

which

example,

hardship to complyrequirements

with the the can

broadened

intended with

electronic-filing requirements can apply by Congress will not occur without final removing staples and taping any cuts or

to remote

populations

withadequate

limited online

portions

of the

document. The IRS

regulations.

In the absence

of these reg­

filers

who lack

technological

proficiency.

Regardless

of thetorn

factors,

little

economic

access and filers who lack adequate tech­ ulations, the IRS would continue to de­ employee must then cross check the in­

nological

proficiency.

Regardless

of the

formation

on requires

the returnsnoagainst

voteprocess

resources

to costly

and inefficient

burden

is expected

for the

waiver

because

submitting

a hardship

waiver

morethe par­

factors, little economic burden is expected processing of paper filings, resources that ent transmittal return (Form 1096) for the

for the waiver process because submitting could be allocated to modernization of IT payer’s TIN, payer’s name, and if either

technology

than filing

paper

For information returns, waiverisrequests

can

be made

forcheck other

a hardship

waiver requires

no more

tech­ returns.

infrastructure.

missing or

illegible,

cross

nology than filing paper returns. For in­

Significant administrative costs in­ submissions for the information or send

many

returns

onrequests

the same

8508.

foremployee

Form 8508.)

formation

returns,

waiver

can Form

be clude

the(See

timeinstructions

it takes an IRS

correspondence to the filer.

made for many returns on the same Form to manually process paper information

Scannable submissions are then pre­

8508. (See instructions

for Form

returns. First,

the IRS

employeeprovide

must exemptions

pared for processing

through the Service

In addition

to 8508.)

hardship waivers,

the final

regulations

for religious

In addition to hardship waivers, the open and inspect the mail to determine Center Recognition/Image Processing

final regulations provide exemptions for what type of return or other form is in System (SCRIPS). Non-scannable sub­

communities for whom using the technology required to file in electronic form conflicts with

their religious beliefs. An exemption means that filers do not have to be pre-approved to paper

March 13, 2023

538

Bulletin No. 2023–11

file. Thus, filers that are eligible for an exemption would not experience additional burden under

missions are sorted, coded, and batched

after ensuring all necessary information

is included, which varies between types

of information returns. The batched in­

formation returns are then forwarded to

the appropriate IRS facility for Integrated

Submission and Remittance Processing

(ISRP). The ISRP employee must manu­

ally enter all required fields and add the

appropriate document and format codes

in accordance with the Internal Revenue

Manual.

In August 2020, the IRS projected the

potential cost and savings for implementa­

tion of the reduction of the electronic-fil­

ing threshold. The IRS estimated that the

savings for IRS Submission Processing

(IRS SP) due to fewer paper information

returns to process when the electronic-fil­

ing threshold was reduced from 250 to 100

returns is 35 full-time equivalents (FTEs),

or $2 million. This savings would be offset

by the cost to enroll new participants in

the FIRE System, which the IRS estimat­

ed would cost 9 FTEs, or $500,000. Thus,

the IRS’s net savings as a result of the re­

duction to the electronic-filing threshold

from 250 to 100 returns is estimated to be

26 FTEs, or $1.5 million.

The IRS estimated that the savings for

IRS SP due to fewer paper information

returns to process when the electronic fil­

ing threshold was reduced from 100 to 10

returns is 147 FTEs, or $8.3 million. This

savings would be offset by the cost to en­

roll new participants in the FIRE System,

which the IRS estimated would cost 40

FTEs, or $2.3 million. Thus, the IRS’s net

savings as a result of the reduction to the

electronic-filing threshold from 100 to 10

returns is estimated to be 107 FTEs, or $6

million.

Finally, the IRS estimated that the sav­

ings for IRS SP due to fewer paper infor­

mation returns to process when the elec­

tronic-filing threshold was reduced from

250 to 10 returns is 182 FTEs, or $10.3

million. For the first year of the reduction,

the savings would be offset by the cost to

enroll new participants in the FIRE Sys­

tem, which the IRS estimated would cost

49 FTEs, or $2.8 million. Thus, for the

first year of implementation, the IRS’s net

savings as a result of the reduction to the

electronic-filing threshold from 250 to 10

returns is estimated to be 133 FTEs, or

$7.5 million.

Bulletin No. 2023–11

For each subsequent year, the IRS esti­

mated that the savings for IRS SP due to

fewer paper information returns to process

is 147 FTEs, or $8.3 million, which would

be offset by some cost for telephone

support.

An increase in electronic filing percent­

age rates change will result in millions

fewer paper documents, freeing up valu­

able IRS resources for other tasks. Based

on taxable year 2020 data, a 10-return

electronic-filing threshold would have re­

sulted in approximately 21 million fewer

paper information returns. While the IRS

projects the number of paper returns will

continue to decrease even absent changes

to the regulations, the decrease is project­

ed to be gradual.

Requiring more electronic filing

would increase the timeliness and accu­

racy of data entry, reduce postage costs,

promote IT modernization efforts, real­

locate IRS staff for priority assignments,

and provide IRS criminal and civil inves­

tigators and other agencies with access to

the data with more up-to-date and accu­

rate information. Moreover, increased ef­

ficiency in processing returns will allow

the IRS to provide faster and better cus­

tomer service to taxpayers. Given the in­

creasing prevalence of electronic filings

in recent years, the final regulations re­

duce the 250-return threshold enacted in

1998 to the 10-return threshold provided

by the TFA.

II. Regulatory Flexibility Act

Pursuant to the Regulatory Flexibili­

ty Act (5 U.S.C. chapter 6), it is hereby

certified that these regulations will not

have a significant economic impact on a

substantial number of small entities. Al­

though these rules may affect a substantial

number of small entities, for the reasons

discussed in the following paragraphs, the

economic impact is not significant.

Under section 6011(e) of the Code and

§§1.6050M-1, 301.6011-2, 301.6011-3,

301.6011-5, 301.6037-2, 301.6057-3,

301.6058-2, and 301.6059-2, filers are

already required to file returns and state­

ments electronically if, during a calendar

year, they are required to file 250 or more

returns. The eight rules—§§1.6050M-1,

301.6011-2, 301.6011-3, 301.6011-5,

301.6037-2, 301.6057-3, 301.6058-2, and

539

301.6059-2—will lower the 250-return

threshold to 10, as authorized by section

6011(e), as amended by section 2301 of

the TFA. A filer may request that the IRS

waive the electronic-filing requirement

if the filer’s cost to comply with the rule

would cause a financial hardship. The

cost to electronically-file for a filer varies

by form and by how many types of forms

the filer is required to file. For example,

low volume information return filers

can electronically-file for approximately

$3.25 per form, with options available for

filing an unlimited number of informa­

tion returns starting at $120. Commercial

software is available for business returns

such as Forms 1120 for as low as $125.

The IRS routinely grants meritorious

hardship-waiver requests. Accordingly,

the economic burden on the limited num­

ber of small entities that are not currently

filing electronically will be slight; small

entities that would experience a financial

hardship because of these eight rules may

seek a waiver. Requesting a waiver will

impose a minor cost in the form of time

to read the expanded instructions, gather

and prepare for submission the informa­

tion and documents substantiating the

request (if needed), and to complete the

form itself.

Under section 6050I of the Code and

§§1.6050I-1 and 1.6050I-2, filers are re­

quired to file Forms 8300 if, in the course

of their trade or business, they receive

more than $10,000 in cash (as that term is

defined in section 6050I(d)) in one trans­

action or in two or more related trans­

actions. The rule under §301.6011-2(b)

(3) requires filers of Forms 8300 to file

those forms electronically if such filers

are also required to file returns electron­

ically under paragraphs (b)(1) and (2) of

§301.6011-2. The Treasury Department

and the IRS expect filers of Form 8300

to use FinCEN’s BSA E-Filing System,

which is free and may be accessed with an

internet connection. See https://bsaefiling.

fincen.treas.gov/main.html (last visited

January 13, 2023). The filers may incur

minor costs in the form of time needed to

enroll in FinCEN’s BSA E-Filing System

and to become familiar with the system,

but the enrollment process should only

take several minutes. The economic im­

pact on small entities should thus not be

significant.

March 13, 2023

Under section 6011(e)(4) of the Code

and §301.1474-1, financial institutions

defined in section 1471(d)(5) of the

Code already are required to electron­

ically file Forms 1042-S. The rule un­

der §301.1474-1(a) extends this filing

requirement to Forms 1042 filed by the

same financial institutions. Small enti­

ties that would experience a financial

hardship because of this rule may seek a

hardship waiver.

Under section 6011(h) of the Code, as

amended by section 3101 of the TFA, or­

ganizations required to file annual returns

relating to any tax imposed by section 511

must file those returns in electronic form.

Because the regulation §301.6011-10

implements this statutory requirement,

the economic impact of the regulation

on small organizations should thus be

insignificant.

Under section 6033(n), as amended by

section 3101 of the TFA, organizations re­

quired to file returns under section 6033

must file those returns in electronic form.

Because the regulations under §§1.60334, 53.6011-1, and 301.6033-4 implement

this statutory requirement, the economic

impact of these regulations on small orga­

nizations should thus be insignificant.

The

seven

regulations

under

§§54.6011-3, 301.6011-11, 301.6011-12,

301.6011-13, 301.6011-14, 301.6011-15,

and 301.6012-2 require electronic filing

for certain returns not currently required

to be filed electronically. Because elec­

tronic filing has become more common,

accessible, and economical, the econom­

ic impact of these rules on small entities

should be insignificant. Moreover, as

discussed above, if the cost to comply

with these electronic-filing requirements

would cause a financial hardship, an en­

tity may request a waiver. The IRS rou­

tinely grants meritorious hardship waiv­

er requests. Accordingly, the burden on

small entities affected by these rules will

be slight.

Accordingly, it is hereby certified that

these regulations will not have a signifi­

cant economic impact on a substantial

number of small entities within the mean­

ing of section 601(6) of the RFA.

Pursuant to section 7805(f) of the In­

ternal Revenue Code, the NPRM preced­

ing this regulation was submitted to the

Chief Counsel for the Office of Advocacy

March 13, 2023

of the Small Business Administration for

comment on its impact on small business.

No comments were received from the

Chief Counsel for the Office of Advoca­

cy of the Small Business Administration.

III. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates

Reform Act of 1995 requires that agencies

assess anticipated costs and benefits and

take certain other actions before issuing a

final rule that includes any Federal man­

date that may result in expenditures in any

one year by a state, local, or tribal gov­

ernment, in the aggregate, or by the pri­

vate sector, of $100 million in 1995 dol­

lars, updated annually for inflation. This

regulation does not include any Federal

mandate that may result in expenditures

by state, local, or tribal governments,

or by the private sector in excess of that

threshold.

IV. Executive Order 13132: Federalism

Executive Order 13132 (Federalism)

prohibits an agency from publishing any

rule that has federalism implications if

the rule either imposes substantial, direct

compliance costs on state and local gov­

ernments, and is not required by statute,

or preempts state law, unless the agency

meets the consultation and funding re­

quirements of section 6 of the Executive

Order. This rule does not have federalism

implications and does not impose sub­

stantial direct compliance costs on state

and local governments or preempt state

law within the meaning of the Executive

Order.

V. Congressional Review Act

Pursuant to the Congressional Review

Act (5 U.S.C. 801 et seq.), the Office of

Information and Regulatory Affairs des­

ignated this rule as not a “major rule,” as

defined by 5 U.S.C 804(2).

Statement of Availability of IRS

Documents

IRS revenue procedures, notices, and

other guidance cited in this document are

published in the Internal Revenue Bulletin

and are available from the Superintendent

540

of Documents, U.S. Government Publish­

ing Office, Washington, DC 20402, or by

visiting the IRS website at http://www.irs.

gov.

Drafting Information

The principal author of these final reg­

ulations is Casey R. Conrad of the Office

of the Associate Chief Counsel (Proce­

dure and Administration). Other person­

nel from the Treasury Department and the

IRS participated in the development of the

regulations.

List of Subjects

26 CFR Part 1

Income taxes, Reporting and record­

keeping requirements.

26 CFR Part 53

Excise taxes, Foundations, Invest­

ments, Lobbying, Reporting and record­

keeping requirements.

26 CFR Part 54

Excise taxes, Pensions, Reporting and

recordkeeping requirements.

26 CFR Part 301

Employment taxes, Estate taxes, Ex­

cise taxes, Gift taxes, Income taxes,

Penalties, Reporting and recordkeeping

requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR parts 1, 53, 54,

and 301 are amended as follows:

PART 1-INCOME TAXES

Paragraph 1. The authority citation for

part 1 is amended by adding the following

entries in numerical order to read in part

as follows:

Authority: 26. U.S.C. 7805 * * *

*****

Section 1.6033-4 also issued under 26

U.S.C. 6033.

*****

Bulletin No. 2023–11

Section 1.6037-2 also issued under 26

U.S.C. 6037.

*****

Par. 2. Section 1.1461-1 is amended by

removing paragraph (c)(5); redesignating

paragraph (i) as paragraph (j); adding a

new paragraph (i); and revising newly re­

designated paragraph (j).

The addition and revision read as

follows:

§1.1461-1 Payment and returns of tax

withheld.

*****

(i) Reporting in electronic form. See

§§301.6011-2(b) and 301.6011-15 of

this chapter for the requirements of a

withholding agent that is not a financial

institution with respect to the filing of

Forms 1042-S and 1042 in electronic

form. See §301.1474-1(a) of this chap­

ter, which applies for purposes of this

section to a withholding agent that is a

financial institution with respect to the

filing of Forms 1042 and 1042-S in elec­

tronic form.

(j) Applicability date. The rules of this

section apply to returns required to be

filed for taxable years ending on or after

December 31, 2023. (For returns required

to be filed for taxable years ending before

December 31, 2023, see this section as in

effect and contained in 26 CFR part 1, as

revised April 1, 2022.)

Par. 3. Section 1.1471-0 is amended by

revising:

a. The entries in the table of contents

for §1.1474-1(e) and (j);

b. The heading for §301.1474-1; and

c. §301.1474-1(d)(1) and (e).

The revisions read as follows:

§1.1471-0 Outline of regulation

provisions for sections 1471 through

1474.

*****

§1.1474-1 Liability for withheld tax and

withholding agent reporting.

*****

(e) Reporting in electronic form.

*****

(j) Applicability date.

*****

Bulletin No. 2023–11

§301.1474-1 Required use of electron­

ic form for financial institutions filing

Form 1042, Form 1042-S, or Form 8966.

*****

(d) * * *

(1) Magnetic media or electronic form.

*****

(e) Applicability date.

Par. 4. Section 1.1474-1 is amended by

revising paragraphs (e) and (j) to read as

follows:

§1.1474-1 Liability for withheld tax

and withholding agent reporting.

*****

(e) Reporting in electronic form. See

§§301.6011-2(b) and 301.6011-15 of this

chapter, which apply for purposes of this

section, for the requirements of a with­

holding agent that is not a financial insti­

tution with respect to the filing of Forms

1042-S and Form 1042 in electronic form.

See §301.1474-1(a) of this chapter for the

requirements applicable to a withholding

agent that is a financial institution with

respect to the filing of Forms 1042 and

1042-S in electronic form.

*****

(j) Applicability date. The rules of this

section apply to returns required to be

filed for taxable years ending on or after

December 31, 2023. (For returns required

to be filed for taxable years ending before

December 31, 2023, see this section as in

effect and contained in 26 CFR part 1, as

revised April 1, 2022.)

Par. 5. Section 1.6033-4 is revised to

read as follows:

§1.6033-4 Required filing in electronic

form for returns by organizations

required to file returns under section

6033.

(a) In general. The return of an or­

ganization that is required to be filed in

electronic form under §301.6033-4 of this

chapter must be filed in accordance with

IRS revenue procedures, publications,

forms, instructions, or other guidance.

(b) Applicability date. The rules of this

section apply for returns required to be

filed for taxable years ending on or after

February 23, 2023.

Par. 6. Section 1.6037-2 is revised to

read as follows:

541

§1.6037-2 Required use of electronic

form for income tax returns of electing

small business corporations.

(a) In general. The return of an electing

small business corporation that is required

to be filed electronically under §301.60372 of this chapter must be filed in accor­

dance with IRS revenue procedures, pub­

lications, forms, or instructions, including

those posted electronically.

(b) Applicability date. The rules of this

section apply to returns required to be

filed for taxable years ending on or after

December 31, 2023.

Par. 7. Section 1.6045-2 is amended by

revising paragraphs (g)(2) and (i) to read

as follows:

§1.6045-2 Furnishing statement

required with respect to certain

substitute payments.

*****

(g) * * *

(2) Reporting in electronic form.

For information returns filed after De­

cember 31, 1996, see §301.6011-2 of

this chapter for rules relating to filing

information returns in electronic form

and for rules relating to waivers granted

for undue hardship. A broker or barter

exchange that fails to file a Form 1099

electronically, when required, may be

subject to a penalty under section 6721

for each such failure. See paragraph (g)

(4) of this section.

*****

(i) Applicability date. This section ap­

plies to substitute payments received by a

broker after December 31, 1984. Section

1.6045-2(c) (as contained in 26 CFR part

1, revised July 15, 2014) applies to payee

statements due after December 31, 2014.

For payee statements due before January

1, 2015, §1.6045-2(c) (as contained in 26

CFR part 1, revised April 2013) applies.

Paragraph (g)(2) of this section applies to

information returns required to be filed

during calendar years beginning after De­

cember 31, 2023.

Par. 8. Section 1.6045-4 is amended by

removing and reserving paragraph (k) and

revising paragraph (s).

The revision reads as follows:

March 13, 2023

§1.6045-4 Information reporting on

real estate transactions with dates of

closing on or after January 1, 1991.

§1.6050I-1 Returns relating to cash in

excess of $10,000 received in a trade or

business.

*****

(s) Applicability date. This section ap­

plies for real estate transactions with dates

of closing (as determined under paragraph

(h)(2)(ii) of this section) that occur on or

after January 1, 1991. Section 1.60454(b)(2)(i)(E), (b)(2)(ii), and (c)(2)(i) (as

contained in 26 CFR part 1, revised May

28, 2009) applies to sales or exchanges of

standing timber for lump-sum payments

completed after May 28, 2009. Section

1.6045-4(m)(1) (as contained in 26 CFR

part 1, revised July 15, 2014) applies to

payee statements due after December 31,

2014. For payee statements due before

January 1, 2015, §1.6045-4(m)(1) (as

contained in 26 CFR part 1, revised April

2013) applies. The removal of paragraph

(k) of this section applies for information

returns required to be filed during calendar

years beginning after December 31, 2023.

Par. 9. Section 1.6050I-0 is amended

by revising the entry in the table of con­

tents for §1.6050I-1(d)(2)(ii) to read as

follows:

(a) * * *

(3) * * *

(ii) Exception. An agent who receives

cash from a principal and uses all of the

cash within 15 days in a cash transaction

(second cash transaction) which is report­

able under section 6050I or section 5331

of title 31 of the United States Code and

the corresponding regulations (31 CFR

Chapter X), and who discloses the name,

address, and taxpayer identification num­

ber of the principal to the recipient in the

second cash transaction need not report the

initial receipt of cash under this section.

*****

(c) * * *

(1) * * *

(iv) Exception for certain loans. A ca­

shier’s check, bank draft, traveler’s check,

or money order received in a designated

reporting transaction is not treated as cash

pursuant to paragraph (c)(1)(ii)(B)(1) of

this section if the instrument constitutes

the proceeds of a loan from a bank (as that

term is defined in 31 CFR Chapter X).

*****

(d) * * *

(2) * * *

(i) In general. If a casino receives cash

in excess of $10,000 and is required to

report the receipt of such cash directly to

the Department of the Treasury (Treasury

Department) under 31 CFR 1021.310 or

1010.360 and is subject to the recordkeep­

ing requirements of 31 CFR 1021.400,

then the casino is not required to make

a return with respect to the receipt of

such cash under section 6050I and these

regulations.

(ii) Casinos exempt under 31 CFR

1010.970(c). Under the authority of sec­

tion 6050I(c)(1)(A), the Secretary may

exempt from the reporting requirements

of section 6050I casinos with gross annual

gaming revenue in excess of $1,000,000

that are exempt under 31 CFR 1010.970(c)

from reporting certain cash transactions to

the Treasury Department under 31 CFR

1021.310 or 1010.360. The determination

whether a casino which is granted an ex­

emption under 31 CFR 1010.970(c) will

be required to report under section 6050I

will be made on a case-by-case basis,

§1.6050I-0 Table of contents.

*****

§1.6050I-1 Returns relating to cash in

excess of $10,000 received in a trade or

business.

*****

(d) * * *

(2) * * *

(ii) Casinos exempt under 31 CFR

1010.970(c).

*****

Par. 10. Section 1.6050I-1 is amended

by:

a. Revising paragraphs (a)(3)(ii), (c)(1)

(iv), and (d)(2)(i) and (ii).

b. In paragraph (d)(2)(iv), redesignat­

ing the example as paragraph (d)(2)(iv)

(A).

c. Revising newly redesignated para­

graph (d)(2)(iv)(A) and adding a reserved

paragraph (d)(2)(iv)(B).

d. Revising paragraphs (e)(1) and (e)

(3)(i).

e. Adding paragraph (h).

The revisions and additions read as

follows:

March 13, 2023

542

concurrently with the granting of such an

exemption.

*****

(iv) * * *

(A) Example. A and B are casinos having gross

annual gaming revenue in excess of $1,000,000. C

is a casino with gross annual gaming revenue of less

than $1,000,000. Casino A receives $15,000 in cash

from a customer with respect to a gaming transac­

tion which the casino reports to the Treasury Depart­

ment under 31 CFR 1021.310 and 1010.360. Casino

B’s hotel division receives $15,000 in cash from a

customer in payment for accommodations provided

to that customer at Casino B’s hotel. Casino C re­

ceives $15,000 in cash from a customer with respect

to a gaming transaction. Casino A is not required to

report the transaction under section 6050I or these

regulations because the exception for certain casinos

provided in paragraph (d)(2)(i) of this section (ca­

sino exception) applies. Casino B’s hotel division

is required to report under section 6050I and these

regulations because the casino exception does not

apply to the receipt of cash by a nongaming business

division. Casino C is required to report under sec­

tion 6050I and these regulations because the casino

exception does not apply to casinos having gross an­

nual gaming revenue of $1,000,000 or less which do

not have to report to the Treasury Department under

31 CFR 1021.310 and 1010.360.

(B) [Reserved]

*****

(e) * * *

(1) Time of reporting. The reports re­

quired by this section must be filed in ac­

cordance with the Form 8300 instructions

and related publications by the 15th day

after the date the cash is received. Howev­

er, in the case of multiple payments relat­

ing to a single transaction (or two or more

related transactions), see paragraph (b) of

this section.

*****

(3) * * *

(i) Where to file. A person making a re­

turn of information under this section must

file Form 8300 in accordance with the

form instructions and related publications.

*****

(h) Applicability date. The rules of this

section apply for returns required to be

filed during calendar years beginning after

December 31, 2023.

Par. 11. Section 1.6050I-2 is amended

by revising paragraphs (c)(1)(i), (c)(3)(i),

and (f) to read as follows:

§1.6050I-2 Returns relating to cash in

excess of $10,000 received as bail by

court clerks.

*****

Bulletin No. 2023–11

(c) * * *

(1) * * *

(i) In general. The information return

required by this section must be filed in

accordance with the Form 8300 instruc­

tions and related publications by the 15th

day after the date the cash bail is received.

*****

(3) * * *

(i) Where to file. Returns required by

this section must be filed in accordance

with the Form 8300 instructions and relat­

ed publications. A copy of the information

return required to be filed under this sec­

tion must be retained for five years from

the date of filing.

*****

(f) Applicability date. The rules of this

section apply for returns required to be

filed during calendar years beginning after

December 31, 2023.

Par. 12. Section 1.6050M-1 is amended

by revising paragraphs (d)(2) and (3) and

(f) to read as follows:

§1.6050M-1 Information returns

relating to persons receiving contracts

from certain Federal executive

agencies.

*****

(d) * * *

(2) Form of reporting—(i) General

rule concerning electronic filing. The

information returns required by this sec­

tion with respect to contracts of a Fed­

eral executive agency for each calendar

quarter must be made in one submission

(or in multiple submissions if permitted

by paragraph (d)(4) of this section). Ex­

cept as provided in paragraph (d)(2)(ii)

of this section, the required returns must

be made in electronic form (within the

meaning of §301.6011-2(a)(1) of this

chapter) in accordance with any applica­

ble revenue procedure or other guidance

promulgated by the Internal Revenue

Service for the filing of such returns un­

der section 6050M.

(ii) Exceptions from electronic filing.

Any Federal executive agency that, on

October 1, has a reasonable expectation

of entering into, during the one-year

period beginning on that date, fewer

than 10 contracts subject to the report­

ing requirements under this section that

are to be filed during the calendar years

Bulletin No. 2023–11

after 2023, may make the information

returns required by this section for each

quarter of that one-year period on the

prescribed paper Form 8596 in accor­

dance with the instructions accompany­

ing such form.

(iii) Exclusions from electronic-filing

requirements—(A) Waivers. The Com­

missioner may grant waivers of the re­

quirements of this section in cases of

undue hardship. One principal factor in

determining hardship will be the amount,

if any, by which the cost of filing the re­

turn electronically in accordance with this

section exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website. The waiv­

er request will specify the type of filing

(that is, a return required under paragraph

(a) of this section) and the period to which

it applies.

(B) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effective

and efficient tax administration. A sub­

mission claiming an exemption must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(3) Place of filing—(i) Returns in electronic form. Information returns made un­

der this section in electronic form must be

filed with the Internal Revenue Service in

accordance with any applicable revenue

procedure or other guidance promulgated

by the Internal Revenue Service relating to

the filing of returns under section 6050M.

(ii) Form 8596. Information returns

made on paper Form 8596 must be filed

with the Internal Revenue Service at the

location specified in the instructions for

that form.

*****

(f) Applicability date—(1) Contracts

required to be reported. Except as other­

wise provided in this paragraph (f), this

section applies to each Federal executive

agency with respect to its contracts en­

tered into on or after January 1, 1989 (in­

cluding any increase in amount obligated

on or after January 1, 1989, that is treated

as a new contract under paragraph (e) of

this section).

543

(2) Contracts not required to be reported. A Federal executive agency is not

required to report—

(i) Any basic or initial contract entered

into before January 1, 1989,

(ii) Any increase contract action occur­

ring before January 1, 1989, that is treated

as a new contract under paragraph (e) of

this section, or

(iii) Any increase contract action that is

treated as a new contract under paragraph

(e) of this section if the basic or initial

contract to which that contract action re­

lates was entered into before January 1,

1989, and—

(A) The increase occurs before April 1,

1990, or

(B) The amount of the increase does

not exceed $50,000.

(3) Illustration. (i) If a Federal execu­

tive agency enters into an initial contract

on December 1, 1988, and the amount

of money obligated under the contract is

increased by $55,000 on April 15, 1990,

then there is no reporting requirement

with respect to the contract when entered

into on December 1, 1988. However, the

April 15, 1990, increase, which is treat­

ed as a new contract under paragraph (e)

of this section, is subject to the reporting

requirements of this section because it is

considered to be a new contract entered

into on April 15, 1990.

(ii) If the $55,000 increase had oc­

curred before April 1, 1990, there would

not have been a reporting requirement

with respect to that increase.

(4) Filing requirements for contracts required to be reported. Section

1.6050M-1(d)(2) and (3) (as contained in

26 CFR part 1, revised February 23, 2023)

applies to information returns required to

be filed during calendar years beginning

after December 31, 2023.

PART 53—FOUNDATION AND

SIMILAR EXCISE TAXES

Par. 13. The authority citation for part

53 is amended by adding an entry in nu­

merical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Section 53.6011-1 also issued under 26

U.S.C. 6011.

*****

Par. 14. Section 53.6011-1 is amended

by:

March 13, 2023

a. Removing paragraph (c).

b. Redesignating paragraphs (d) and (e)

as paragraphs (c) and (d), respectively.

c. Adding a new paragraph (e).

The addition reads as follows:

§53.6011-1 General requirement of

return, statement or list.

*****

(e) The rules of this section apply to

any returns required to be filed under this

section on or after January 11, 2021.

PART 54—PENSION EXCISE TAXES

Par. 15. The authority citation for part

54 is amended by adding an entry in nu­

merical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

*****

Section 54.6011-3 also issued under 26

U.S.C. 6011.

*****

Par. 16. Section 54.6011-3 is added to

read as follows:

§54.6011-3 Required use of electronic

form for the filing requirements for the

return for certain excise taxes related

to employee benefit plans.

(a) Excise tax returns required in electronic form. Any employer or individual

required to file an excise tax return on

Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, under

§54.6011-1 of this chapter must file the

excise tax return electronically if the filer

is required by the Internal Revenue Code

or regulations to file at least 10 returns of

any type during the calendar year that the

Form 5330 is due. The Commissioner may

direct the type of electronic filing and may

also exempt certain returns from the elec­

tronic-filing requirements of this section

through revenue procedures, publications,

forms, instructions, or other guidance, in­

cluding postings on the IRS.gov website.

Returns filed electronically must be made

in accordance with the applicable revenue

procedures, publications, forms, instruc­

tions, or other guidance.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

March 13, 2023

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website. The waiv­

er request will specify the type of filing

(that is, a return required under §54.60111 of this chapter) and the period to which

it applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effective

and efficient tax administration. A sub­

mission claiming an exemption must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(3) Additional exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

(c) Failure to file. If a filer required to

file the Form 5330 fails to file the report

electronically when required to do so by

this section, the filer has failed to file the

report. See generally section 6651(a)(1)

for the penalty for the failure to file a tax

return or to pay tax. For general rules re­

lating to the failure to file a tax return or to

pay tax, see the regulations under 26 CFR

301.6651-1 (Regulations on Procedure

and Administration).

(d) Meaning of terms. The follow­

ing definitions apply for purposes of this

section:

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, instructions, or other

guidance.

(2) Calculating the number of returns a

filer is required to file—(i) In general. For

purposes of this section, a filer is required

to file at least 10 returns during a calendar

year if the filer is required to file at least

544

10 returns of any type, including informa­

tion returns (for example, Forms W-2 and

Forms 1099), income tax returns, employ­

ment tax returns, and excise tax returns.

(ii) Definition of filer. For purposes of

this section, the term filer means the per­

son required to report the tax on the Form

5330. For general rules on who is required

to report the tax on the Form 5330, see the

Instructions to the Form 5330.

(e) Example. The following example

illustrates the provisions of paragraph (d)

(2) of this section:

(1) In 2023, Employer A (the plan sponsor and

plan administrator of Plan B) is required to file

Form 5330 for its nondeductible contribution under

section 4972 to Plan B. During the 2024 calendar

year, Employer A is required to file 20 returns (in­

cluding 19 Forms 1099-R Distributions From Pensions, Annuities, Retirement, Profit-Sharing Plans,

IRAs, Insurance Contracts, etc., and one Form 5500

series, Annual Return/Report of the Employee Benefit Plan). Plan B’s plan year is the calendar year. Be­

cause Employer A is required to file at least 10 returns

during the 2024 calendar year, Employer A must file

the 2023 Form 5330 for Plan B electronically.

(2) [Reserved]

(f) Applicability date. The rules of this

section apply to any Form 5330 required

to be filed for taxable years ending on or

after December 31, 2023.

PART 301—PROCEDURE AND

ADMINISTRATION

Par. 17. The authority citation for part

301 is amended by adding entries in nu­

merical order to read in part as follows:

Authority: 26 U.S.C. 7805.

*****

Section 301.6011-10 also issued under

26 U.S.C. 6011.

Section 301.6011-11 also issued under

26 U.S.C. 6011.

Section 301.6011-12 also issued under

26. U.S.C. 6011.

Section 301.6011-13 also issued under

26 U.S.C. 6011.

Section 301.6011-14 also issued under

26 U.S.C. 6011.

Section 301.6011-15 also issued under

26 U.S.C. 6011.

Section 301.6012-2 also issued under

26 U.S.C. 6012.

*****

Section 301.6057-3 also issued under

26 U.S.C. 6011 and 6057.

Section 301.6058-2 also issued under

26 U.S.C. 6011 and 6058.

Bulletin No. 2023–11

Section 301.6059-2 also issued under

26 U.S.C. 6011 and 6059.

*****

Section 301.6721-1 also issued under

26 U.S.C. 6011 and 6721.

*****

Par. 18. Section 301.1474-1 is amend­

ed by revising the section heading and

paragraphs (a) through (c), (d)(1), and (e)

to read as follows:

§301.1474-1 Required use of electronic

form for financial institutions filing

Form 1042, Form 1042-S, or Form

8966.

(a) Financial institutions filing certain returns. If a financial institution

is required to file a Form 1042, Annual

Withholding Tax Return for U.S. Source

Income of Foreign Persons, (or succes­

sor form) under §1.1474-1(c) of this

chapter, the financial institution must

file the return information required by

the applicable forms and schedules elec­

tronically. If a financial institution is

required to file a Form 1042-S, Foreign

Person’s U.S. Source Income Subject to

Withholding, (or such other form as the

IRS may prescribe) under §1.1474-1(d)

of this chapter, the financial institution

must file the information required by the

applicable forms and schedules electron­

ically. Additionally, if a financial institu­

tion is required to file Form 8966, FATCA

Report, (or such other form as the IRS

may prescribe) to report certain infor­

mation about U.S. accounts, substantial

U.S. owners of foreign entities, or own­

er-documented FFIs as required under

this chapter, the financial institution must

file the required information in electronic

form. Returns filed electronically must

be made in accordance with applicable

regulations, revenue procedures, publi­

cations, forms, instructions, and the IRS.

gov internet site. In prescribing regula­

tions, revenue procedures, publications,

forms, and instructions, including those

on the IRS.gov internet site, the Commis­

sioner may direct the type of electronic

filing.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Com­

missioner may grant waivers of the re­

quirements of this section in cases of

undue hardship. One principal factor in

Bulletin No. 2023–11

determining hardship will be the amount,

if any, by which the cost of filing the re­

turn electronically in accordance with

this section exceeds the cost of filing the

return on paper. A request for a waiver

must be made in accordance with appli­

cable IRS revenue procedures, publica­

tions, forms, instructions, or other guid­

ance, including postings to the IRS.gov

website. The waiver request will specify

the type of filing (that is, a return required

under §1.1474-1(c) or (d) of this chapter,

or a Form 8966) and the period to which

it applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effective

and efficient tax administration. A sub­

mission claiming an exemption must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(3) Additional Exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

(c) Failure to file. If a financial institu­

tion fails to file a Form 1042 electronically

when required to do so by this section, the

financial institution has failed to file the

return. See section 6651 for the addition

to tax for failure to file a return. In deter­

mining whether there is reasonable cause

for failure to file the return, §301.66511(c) and rules similar to the rules in

§301.6724-1(c)(3) (undue economic hard­

ship related to filing information returns

electronically) will apply. If a financial

institution fails to file a Form 1042-S or

a Form 8966 electronically when required

to do so by this section, the financial in­

stitution has failed to comply with the

information reporting requirements un­

der section 6721 of the Code. See section

6724(c) for failure to meet magnetic me­

dia requirements. In determining whether

there is reasonable cause for failure to

file the return, §301.6651-1(c) and rules

similar to the rules in §301.6724-1(c)(3)

(undue economic hardship related to filing

information returns on magnetic media)

will apply.

(d) * * *

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

545

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, instructions, or other

guidance.

*****

(e) Applicability date. This section

applies to any Form 1042 (or successor

form) required to be filed for taxable years

ending on or after December 31, 2023.

This section applies to any Form 1042–S

or Form 8966 (or any other form that the

IRS may prescribe) filed with respect to

calendar years ending after December 31,

2013, except that paragraph (b)(2) of this

section only applies to Forms 1042-S or

Forms 8966 required to be filed for tax­

able years ending on or after December

31, 2023.

Par. 19. Section 301.6011-2 is amended

by revising the section heading and para­

graphs (a)(1), (b), (c), and (g) to read as

follows:

§301.6011-2 Required use of electronic

form.

(a) * * *

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures or publications, or, in the case of

returns filed with the Social Security Ad­

ministration, Social Security Administra­

tion publications. These generally include

electronic filing, as well as magnetic tape,

tape cartridge, diskette, and other media

specifically permitted under the applicable

regulations, procedures, or publications.

*****

(b) Returns required electronically. (1)

If the use of Form 1042–S, Form 1094 se­

ries, Form 1095–B, Form 1095–C, Form

1097-BTC, Form 1098, Form 1098-C,

Form 1098–E, Form 1098-Q, Form 1098–

T, Form 1099 series, Form 3921, Form

3922, Form 5498 series, Form 8027, or

Form W–2G is required by the applicable

regulations or revenue procedures for the

purpose of making an information return,

the information required by the form must

be submitted electronically, except as oth­

erwise provided in paragraph (c) of this

March 13, 2023

section. Returns filed electronically must

be made in accordance with applicable

revenue procedures, publications, forms,

or instructions.

(2) If the use of Form W–2 (Wage and

Tax Statement), Form 499R–2/W–2PR

(Withholding Statement (Puerto Rico)),

Form W–2VI (U.S. Virgin Islands Wage

and Tax Statement), Form W–2GU

(Guam Wage and Tax Statement), or Form

W–2AS (American Samoa Wage and Tax

Statement) is required for the purpose of

making an information return, the infor­

mation required by the form must be sub­

mitted electronically, except as otherwise

provided in paragraph (c) of this section.

Returns described in this paragraph (b)

(2) must be made in accordance with ap­

plicable Social Security Administration

procedures or publications (which may be

obtained from the local office of the Social

Security Administration).

(3) If a person is required to make a

return for the purpose of section 6050I,

and such person is required to file returns

described in paragraphs (b)(1) and (2) of

this section electronically, then such per­

son must also file the information required

by section 6050I electronically. Returns

described in this paragraph (b)(3) must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website, as well as

instructions and guidance on the FinCEN.

gov website.

(4) The Commissioner may exempt

certain returns from the electronic require­

ments of this section through revenue pro­

cedures, publications, forms, instructions,

or other guidance, including postings to

the IRS.gov website.

(c) Electronic-filing threshold—(1) In

general. No person is required to file in­

formation returns electronically in a cal­

endar year unless the person is required to

file at least 10 returns during that calendar

year. Persons required to file fewer than

10 returns during the calendar year may

make the returns on the prescribed pa­

per form or, alternatively, electronically

in accordance with paragraph (b) of this

section.

(2) Machine-readable forms. Returns

made on a paper form under paragraph (c)

(1) of this section must be machine-read­

able, as described in paragraph (a)(2) of

March 13, 2023

this section, if applicable revenue proce­

dures provide for a machine-readable pa­

per form.

(3) Special rule for partnerships. Not­

withstanding paragraph (c)(1) of this

section, a partnership with more than

100 partners is required to file its informa­

tion returns covered under paragraph (b)

of this section electronically.

(4) Calculating the number of returns—

(i) Aggregation of returns. In calculating

whether a person is required to file at least

10 returns under paragraph (c)(1) of this

section, all the information returns de­

scribed in paragraphs (b)(1) and (2) of this

section required to be filed during the cal­

endar year are counted in the aggregate.

Neither corrected information returns, in­

formation returns described in paragraph

(b)(3) of this section, nor returns other

than those described in paragraphs (b)(1)

and (2) of this section are taken into ac­

count in calculating whether a person is

required to file at least 10 returns.

(ii) Corrected returns. (A) If an orig­

inal information return covered by para­

graph (b) of this section is required to be

filed electronically, any corrected infor­

mation return corresponding to that origi­

nal return must also be filed electronically.

(B) If an original information return is

permitted to be filed on paper and is filed

on paper, any corrected information return

corresponding to that original return must

be filed on paper.

(5) Examples. The provisions of para­

graphs (c)(3) and (4) of this section are

illustrated by the following examples:

(i) Example 1. During the 2024 calendar year,

Company W, is required to file five Forms 1099INT, Interest Income, and five Forms 1099-DIV,

Dividends and Distributions, for a total of 10 re­

turns covered by paragraphs (b)(1) and (2) of this

section. Because Company W is required to file 10

returns as calculated under paragraph (c)(4) of this

section during the 2024 calendar year, Company W

must file all its 2023 Forms 1099-INT and 1099-DIV

electronically.

(ii) Example 2. Same facts as paragraph (c)(5)(i)

of this section (Example 1), except after electronical­

ly filing its 10 Forms 1099-DIV and 1099-INT, Com­

pany W files two corrected Forms 1099-DIV and

four corrected Forms 1099-INT. Because Company

W electronically filed its original 2023 Forms 1099DIV and 1099-INT, Company W must electron­

ically file its corrected 2023 Forms 1099-DIV and

1099-INT.

(iii) Example 3. Same facts as paragraph (c)(5)(i)

of this section (Example 1), except on May 16, 2024,

Company W received cash in excess of $10,000 and

must file a Form 8300 by May 31, 2024. Because

546

Company W is required to file information returns

covered under paragraphs (b)(1) and (2) of this sec­

tion electronically during the 2024 calendar year,

Company W must also file all its Forms 8300 elec­

tronically during the 2024 calendar year.

(iv) Example 4. Same facts as paragraph (c)(5)

(i) of this section (Example 1), except Company W

is not required to file any Forms 1099-INT during

calendar year 2024. On December 19, 2023, Com­

pany W receives cash in excess of $10,000 and

must file a Form 8300 by January 3, 2024. Because

Company W is not required to file information re­

turns covered under paragraphs (b)(1) and (2) of this

section electronically during the 2024 calendar year,

Company W is not required to file this Form 8300

electronically.

(v) Example 5. During the 2024 calendar year,

Partnership P, a partnership with 15 partners, is

required to file eight Forms 1099-MISC, Miscellaneous Information, and five Forms 1099-INT.

Because Partnership P is required to file at least 10

returns covered by paragraphs (b)(1) and (2) of this

section during the 2024 calendar year, Partnership

P must electronically file all its 2022 Forms 1099MISC and 1099-INT.

(6) Exclusions from electronic-filing

requirements—(i) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website. The waiv­

er request will specify the type of filing

(that is, a return required under paragraph

(b) of this section) and the period to which

it applies. For purposes of paragraph (b)

(3) of this section, a waiver granted for a

return under paragraph (b)(1) or (2) will

be deemed to have waived the electron­

ic-filing requirement for any returns re­

quired to be filed under section 6050I.

(ii) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effec­

tive and efficient tax administration. An

exemption will be allowed for filers for

whom using the technology required to

file in electronic form conflicts with their

religious beliefs. A submission claiming

an exemption must be made in accordance

with applicable IRS revenue procedures,

publications, forms, instructions, or other

guidance, including postings to the IRS.

gov website.

Bulletin No. 2023–11

(iii) Additional Exclusion. If an em­

ployer is required to make a final return

on Form 941, or a variation thereof, and

expedited filing of Forms W-2, Forms

499R-2/W-2PR, Forms W-2VI, Forms

W-2GU, or Form W-2AS is required, if

the IRS’s systems do not support electron­

ic filing, taxpayers will not be required to

file electronically (see §31.6071(a)-1(a)

(3)(ii) of this chapter).

*****

(g) Applicability date. The rules of

this section apply to information returns

required to be filed during calendar years

beginning after December 31, 2023.

Par. 20. Section 301.6011-3 is amended

by:

a. Revising the section heading.

b. Revising paragraphs (a), (b), and (d)

(1).

c. Redesignating paragraph (d)(5) as

(d)(6) and adding new paragraph (d)(5).

d. Revising newly redesignated para­

graph (d)(6).

e. Revising paragraphs (e) and (f).

The revisions and addition read as

follows:

§301.6011-3 Required use of electronic

form for partnership returns.

(a) Partnership returns required electronically. (1) Except as otherwise pro­

vided in paragraph (b) of this section, a

partnership required to file a partnership

return pursuant to §1.6031(a)-1 of this

chapter, must file the information required

by the applicable forms and schedules

electronically, if

(i) the partnership is required by the In­

ternal Revenue Code or regulations to file

at least 10 returns (as described in para­

graph (d)(5) of this section) during the

calendar year ending with or within the

taxable year of the partnership, or

(ii) the partnership has more than 100

partners during the partnership’s taxable

year.

(2) The Commissioner may direct the

type of electronic filing and may also ex­

empt certain returns from the electronic

requirements of this section through rev­

enue procedures, publications, forms, in­

structions, or other guidance, including

postings on the IRS.gov website. Returns

filed electronically must be made in accor­

dance with the applicable revenue proce­

Bulletin No. 2023–11

dures, publications, forms, instructions, or

other guidance.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, includ­

ing postings to the IRS.gov website. The

waiver request will specify the type of

filing (that is, a return required under

§1.6031(a)-1 of this chapter) and the pe­

riod to which it applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effec­

tive and efficient tax administration. An

exemption will be allowed for filers for

whom using the technology required to

file in electronic form conflicts with their

religious beliefs. A submission claiming

an exemption must be made in accordance

with applicable IRS revenue procedures,

publications, forms, instructions, or other

guidance, including postings to the IRS.

gov website.

(3) Additional Exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

*****

(d) * * *

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, instructions, or other

guidance.

*****

(5) Calculating the number of returns.

For purposes of this section, a partnership

is required to file at least 10 returns if,

during the calendar year ending with or

within the taxable year of the partnership,

the partnership is required to file at least

547

10 returns of any type, including income

tax returns, employment tax returns, ex­

cise tax returns, and information returns

(for example, Forms W-2 and Forms 1099,

but not including schedules required to be

included with a partnership return). In the

case of a short-period return, a partner­

ship is required to file at least 10 returns

if, during the calendar year in which the

partnership’s short taxable year ends, the

partnership is required to file at least 10

returns of any type, including informa­

tion returns (for example, Forms W-2 and

Forms 1099, but not including schedules

required to be included with a partnership

return), income tax returns, employment

tax returns, and excise tax returns.

(6) Partnerships with more than 100

partners. A partnership has more than

100 partners if, over the course of the

partnership’s taxable year, the partnership

had more than 100 partners, regardless of

whether a partner was a partner for the

entire year or whether the partnership had

over 100 partners on any particular day in

the year. For purposes of this paragraph

(d)(6), however, only those persons hav­

ing a direct interest in the partnership must

be considered partners for purposes of de­

termining the number of partners during

the partnership’s taxable year.

(e) Examples. The following examples

illustrate the provisions of this section. In

the examples, the partnerships’ taxable

year is the calendar year 2023 and the

partnerships had fewer than 10 returns

required to be filed during calendar year

2023:

(1) Example 1. Partnership P had five general

partners and 90 limited partners on January 1, 2023.

On March 15, 2023, 10 more limited partners ac­

quired an interest in P. On September 29, 2023, the

10 newest partners sold their individual partnership

interests to C, a corporation which was one of the

original 90 limited partners. On December 31, 2023,

P had the same five general partners and 90 limited

partners it had on January 1, 2023. P had a total of

105 partners over the course of partnership taxable

year 2023. Therefore, P must file its 2023 partnership

return electronically.

(2) Example 2. Partnership Q is a general part­

nership that had 95 partners on January 1, 2023. On

March 15, 2023, 10 partners sold their individual

partnership interests to corporation D, which was

not previously a partner in Q. On September 29,

2023, corporation D sold one-half of its partner­

ship interest in equal shares to five individuals, who

were not previously partners in Q. On December

31, 2023, Q had a total of 91 partners, and on no

date in 2023 did Q have more than 100 partners.

Over the course of the year, however, Q had 101

March 13, 2023

partners. Therefore, Q must file its 2023 partnership

return electronically.

(3) Example 3. Partnership G is a general part­

nership with 100 partners on January 1, 2023. There

are no new partners added to G in 2023. One of G’s

partners, A, is a partnership with 53 partners. A is one

partner, regardless of the number of partners A has.

Therefore, G has 100 partners and is not required to

file its 2023 partnership return electronically.

(4) Example 4. Same facts as paragraph (e)(3)

of this section (Example 3), except partnership G is

also required to file nine Forms 1099-MISC during

calendar year 2023 in addition to its 2022 partner­

ship return. Because partnership G is required to file

at least 10 returns of any type during calendar year

2023, partnership G must file its 2023 partnership

return electronically.

(f) Applicability date. The rules of this

section apply to partnership returns re­

quired to be filed during calendar years

beginning after December 31, 2023.

Par. 21. Section 301.6011-5 is amended

by revising the section heading, and para­

graphs (a), (b), (d)(1) and (5), (e), and (f)

to read as follows:

§301.6011-5 Required use of electronic

form for corporate income tax returns.

(a) Corporate income tax returns required electronically. (1) A corporation

required to file a corporate income tax

return on Form 1120, U.S. Corporation

Income Tax Return, under §1.6012-2 of

this chapter must file its corporate income

tax return electronically if the corporation

is required by the Internal Revenue Code

or regulations to file at least 10 returns (as

defined in paragraph (d)(5) of this section)

during the calendar year ending with or

within the taxable year of the corporation.

(2) All members of a controlled group

of corporations must file their corporate

income tax returns electronically if the

aggregate number of returns required to

be filed by the controlled group of corpo­

rations is at least 10 (as defined in para­

graph (d)(5) of this section) during the

calendar year ending with or within the

taxable year of the controlled group of

corporations.

(3) The Commissioner may direct the

type of electronic filing and may also ex­

empt certain returns from the electronic

requirements of this section through rev­

enue procedures, publications, forms, in­

structions, or other guidance, including

postings on the IRS.gov website. Returns

filed electronically must be made in accor­

dance with the applicable revenue proce­

March 13, 2023

dures, publications, forms, instructions, or

other guidance.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website. The waiv­

er request will specify the type of filing

(that is, a return required under §1.6012-2

of this chapter) and the period to which it

applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effec­

tive and efficient tax administration. An

exemption will be allowed for filers for

whom using the technology required to

file in electronic form conflicts with their

religious beliefs. A submission claiming

an exemption must be made in accordance

with applicable IRS revenue procedures,

publications, forms, instructions, or other

guidance, including postings to the IRS.

gov website.

(3) Additional Exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

*****

(d) * * *

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, instructions, or other

guidance.

*****

(5) Calculating the number of returns.

For purposes of this section, a corpora­

tion or controlled group of corporations

is required to file at least 10 returns if,

during the calendar year ending with or

within the taxable year of the corporation

548

or the controlled group, the corporation

or the controlled group is required to file

at least 10 returns of any type, including

information returns (for example, Forms

W-2 and Forms 1099), income tax returns,

employment tax returns, and excise tax re­

turns. In the case of a short-period return,

a corporation is required to file at least

10 returns if, during the calendar year in

which the corporation’s short taxable year

ends, the corporation is required to file

at least 10 returns of any type, including

information returns (for example, Forms

W-2 and Forms 1099), income tax returns,

employment tax returns, and excise tax re­

turns. If the corporation is a member of a

controlled group, calculating the number

of returns the corporation is required to

file includes all returns required to be filed

by all members of the controlled group

during the calendar year ending with or

within the taxable year of the controlled

group.

(e) Example. The following example

illustrates the provisions of this section:

(1) The taxable year of Corporation X, a fis­

cal-year taxpayer, ends on September 30. During

the calendar year ending December 31, 2023, X

was required to file one Form 1120, U.S. Corporation Income Tax Return, six Forms W-2, Wage and

Tax Statement, three Forms 1099-DIV, Dividends

and Distributions, one Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return,

and four Forms 941, Employer’s Quarterly Federal

Tax Return. Because X is required to file 10 returns

of any type during calendar year 2023, the calendar

year that ended within its taxable year ending Sep­

tember 30, 2024, X is required to file its Form 1120

electronically for its taxable year ending Septem­

ber 30, 2024.

(2) [Reserved]

(f) Applicability date. The rules of this

section apply to corporate income tax re­

turns required to be filed during calendar

years beginning after December 31, 2023.

Par. 22. Section 301.6011-10 is added

to read as follows:

§301.6011-10 Certain organizations,

including trusts, required to file

unrelated business income tax returns

in electronic form.

(a) Unrelated business income tax returns required in electronic form. (1) Or­

ganizations, including trusts, subject to

tax under section 511 that are required

to file a return under § 1.6012-2(e) or §

1.6012-3(a)(5) of this chapter to report

Bulletin No. 2023–11

gross income included in computing un­

related business taxable income, as de­

fined in section 512, or that are otherwise

required to file Form 990-T, Exempt Organization Business Income Tax Return

(and proxy tax under section 6033(e)),

are required to file that return in electron­

ic form.

(2) Returns filed in electronic form

must be filed in accordance with appli­

cable revenue procedures, publications,

forms, instructions, or other guidance.

(b) Failure to file. If an organization or

trust fails to file an unrelated business in­

come tax return in electronic form when

required to do so by this section, the or­

ganization or trust has failed to file the re­

turn. See section 6651 for the addition to

tax for failure to file a return. In determin­

ing whether there is reasonable cause for

failure to file the return, §301.6651-1(c)

will apply.

(c) Applicability date. The rules of this

section apply to unrelated business income

tax returns required to be filed during cal­

endar years beginning after February 23,

2023.

Par. 23. Section 301.6011-11 is added

to read as follows:

§301.6011-11 Required use of electronic

form for certain returns for taxadvantaged bonds.

(a) Return for credit payments to issuers of qualified bonds. (1) An issuer of

a qualified bond required to file a return

for credit payments on Form 8038-CP,

Return for Credit Payments to Issuers of

Qualified Bonds, must file the return elec­

tronically if the issuer is required to file

at least 10 returns (as determined under

paragraph (d) of this section) during the

calendar year.

(2) Returns filed electronically must be

completed in accordance with applicable

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Com­

missioner may grant waivers of the re­

quirements of this section in cases of

undue hardship. One principal factor in

determining hardship will be the amount,

if any, by which the cost of filing the re­

turn electronically in accordance with this

Bulletin No. 2023–11

section exceeds the cost of filing a paper

return. An issuer’s request for a waiver

must be submitted in accordance with ap­

plicable revenue procedures, publications,

forms, instructions, or other guidance, in­

cluding postings to the IRS.gov website.

The waiver request must specify the type

of filing (that is, the return required to be

filed electronically under this section), the

name of the issuer, the name of the bond

issue, the issue date of the tax-advantaged

bond (as defined in §1.150-1(b) of this

chapter), and any other information speci­

fied in the applicable revenue procedures,

publications, forms, instructions, or other

guidance, including postings to the IRS.

gov website.

(2) Exemptions. The Commissioner

may provide an exemption from the elec­

tronic-filing requirement of paragraph (a)

(1) of this section through revenue proce­

dures, publications, forms, instructions, or

other guidance, including postings to the

IRS.gov website, to promote effective and

efficient tax administration. A submission

claiming an exemption must be made in

accordance with applicable revenue pro­

cedures, publications, forms, instructions,

or other guidance, including postings to

the IRS.gov website.

(3) Additional Exclusion. If the IRS’s

systems do not support electronic filing,

taxpayers will not be required to file a re­

turn electronically under this section.

(c) Meaning of terms. The follow­

ing definitions apply for purposes of this

section:

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, instructions, or other

guidance.

(2) Qualified bond. The term qualified

bond means a tax-advantaged bond that is

a taxable bond that provides a refundable

Federal tax credit payable directly to the

issuer of the bond under former section

6431 or any other tax-advantaged bond

(as defined in §1.150-1(b) of this chap­

ter) that provides a refundable Federal tax

credit payment to an issuer of such bond.

549

(3) Return for credit payments to issuers of qualified bonds. The term return

for credit payments to issuers of qualified

bonds means a Form 8038-CP, Return for

Credit Payments to Issuers of Qualified

Bonds, or such other form prescribed by

the Commissioner for the purpose of filing

a return for credit payment with respect to

a qualified bond.

(d) Calculating the number of returns—(1) Aggregation of returns. For

purposes of this section, an issuer of a

tax-advantaged bond is required to file

at least 10 returns if, during the calendar

year, the issuer is required to file at least

10 returns of any type, including informa­

tion returns (for example, Forms W-2 and

Forms 1099), income tax returns, employ­

ment tax returns, and excise tax returns.

(2) Corrected returns. (i) If an original

return covered by this section is required

to be filed electronically, any corrected re­

turn corresponding to that original return

must also be filed electronically.

(ii) If an original return covered by this

section is permitted to be filed on paper

and is filed on paper, any corrected return

corresponding to that original return must

be filed on paper.

(e) Applicability date. The rules of this

section apply to returns for tax-advantaged

bonds filed after December 31, 2023.

Par. 24. Section 301.6011-12 is added

to read as follows:

§301.6011-12 Required use of

electronic form for returns of certain

excise taxes under Chapters 41 and 42

of the Internal Revenue Code.

(a) Excise tax returns required electronically. (1) Any person required to file an

excise tax return on Form 4720, Return of

Certain Excise Taxes Under Chapters 41

and 42 of the Internal Revenue Code, un­

der §53.6011-1 of this chapter must file

its excise tax return electronically if the

person is required by the Internal Revenue

Code or regulations to file at least 10 re­

turns (as defined in paragraph (d)(3) of

this section) during the calendar year.

(2) The Commissioner may direct the

type of electronic filing and may also ex­

empt certain returns from the electronic

requirements of this section through rev­

enue procedures, publications, forms, in­

structions, or other guidance, including

March 13, 2023

postings on the IRS.gov website. Returns

filed electronically must be made in accor­

dance with the applicable revenue proce­

dures, publications, forms, instructions, or

other guidance.

(3) Paragraph (a)(1) of this section is

not applicable to private foundations that

are subject to the filing requirements of

§301.6033-4.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website. The waiv­

er request will specify the type of filing

(that is, a return required under §53.60111 of this chapter) and the period to which

it applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effective

and efficient tax administration. A sub­

mission claiming an exemption must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(3) Additional exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

(c) Failure to file. If a person fails to file

an excise tax return electronically when

required to do so by this section, the per­

son has failed to file the return. See section

6651 for the addition to tax for failure to

file a return. In determining whether there

is reasonable cause for failure to file the

return, §301.6651-1(c) and rules similar

to the rules in §301.6724-1(c)(3) (undue

economic hardship related to filing infor­

mation returns electronically) will apply.

(d) Meaning of terms. The follow­

ing definitions apply for purposes of this

section:

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

March 13, 2023

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as magnet­

ic tape, tape cartridge, diskette, and other

media specifically permitted under the ap­

plicable regulations, procedures, publica­

tions, forms, instructions, or other guidance.

(2) Excise tax return. The term excise

tax return means a Form 4720, Return

of Certain Excise Taxes Under Chapters

41 and 42 of the Internal Revenue Code,

along with all other related forms, sched­

ules, and statements that are required to

be attached to the Form 4720, including

amended and superseding returns.

(3) Calculating the number of returns.

For purposes of this section, a person is re­

quired to file at least 10 returns if, during

the calendar year ending with or within

the person’s taxable year, the person is re­

quired to file at least 10 returns of any type,

including information returns (for example,

Forms W-2 and Forms 1099), income tax

returns, employment tax returns, and ex­

cise tax returns. In the case of a short-peri­

od return, a person is required to file at least

10 returns if, during the calendar year in

which the person’s short taxable year ends,

the person is required to file at least 10 re­

turns of any type, including information re­

turns (for example, Forms W-2 and Forms

1099), income tax returns, employment tax

returns, and excise tax returns.

(e) Example. The following example

illustrates the provisions of this section:

(1) During the calendar year ending December

31, 2023, Trust X was required to file one Form

4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code, which

related to the 2022 taxable year, and 10 Forms W-2,

Wage and Tax Statement, which reported wages paid

to employees during 2022. Because X is required to

file 11 returns during calendar year 2023, X is re­

quired to file its Form 4720 electronically for its tax­

able year ended December 31, 2023.

(2) [Reserved]

(f) Applicability date. The rules of this

section apply to excise tax returns re­

quired to be filed for taxable years ending

on or after December 31, 2023.

Par. 25. Section 301.6011-13 is added

to read as follows:

§301.6011-13 Required use of

electronic form for split-interest trust

returns.

(a) Split-interest trust returns required

electronically. (1) Any trust required to

550

file an information return on Form 5227,

Split-Interest Trust Information Return,

under §53.6011-1 of this chapter must

file its return electronically if the trust is

required by the Internal Revenue Code or

regulations to file at least 10 returns (as

defined in paragraph (d)(3) of this section)

during the calendar year.

(2) The Commissioner may direct the

type of electronic filing and may also ex­

empt certain returns from the electronic

requirements of this section through rev­

enue procedures, publications, forms, in­

structions, or other guidance, including

postings on the IRS.gov website. Returns

filed electronically must be made in ac­

cordance with applicable revenue proce­

dures, publications, forms, or instructions.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website. The waiv­

er request will specify the type of filing

(that is, a return required under §53.60111 of this chapter) and the period to which

it applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effective

and efficient tax administration. A sub­

mission claiming an exemption must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(3) Additional exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

(c) Failure to file. If a trust fails to file

an excise tax return electronically when

required to do so by this section, the trust

has failed to file the return. See section

6652 for the addition to tax for failure to

file a return. In determining whether there

is reasonable cause for failure to file the

return, §301.6652-1(f) and rules similar

Bulletin No. 2023–11

to the rules in §301.6724-1(c)(3) (undue

economic hardship related to filing infor­

mation returns electronically) will apply.

(d) Meaning of terms. The follow­

ing definitions apply for purposes of this

section:

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, instructions, or other

guidance.

(2) Split-Interest Trust return. The

term split-interest trust return means a

Form 5227, Split-Interest Trust Information Return, along with all other relat­

ed forms, schedules, and statements that

are required to be attached to the Form

5227, including amended and superseding

returns.

(3) Calculating the number of returns.

For purposes of this section, a trust is re­

quired to file at least 10 returns if, during

the calendar year ending with or within the

trust’s taxable year, the trust is required

to file at least 10 returns of any type, in­

cluding information returns (for example,

Forms W-2 and Forms 1099), income tax

returns, employment tax returns, and ex­

cise tax returns. In the case of a short-peri­

od return, a trust is required to file at least

10 returns if, during the calendar year in

which the trust’s short taxable year ends,

the trust is required to file at least 10 re­

turns of any type, including information

returns (for example, Forms W-2 and

Forms 1099), income tax returns, employ­

ment tax returns, and excise tax returns.

(e) Example. The following example

illustrates the provisions of this section:

(1) During the calendar year ending December

31, 2023, Trust X was required to file one Form

5227, Split-Interest Trust Information Return, one

Form 4720, Return of Certain Excise Taxes Under

Chapters 41 and 42 of the Internal Revenue Code,

and 10 Forms 1099-DIV, Dividends and Distributions. Because X is required to file 12 returns during

the calendar year 2023, X is required to file its Form

5227 electronically for its taxable year ending De­

cember 31, 2023.

(2) [Reserved]

(f) Applicability date. The rules of this

section apply to Split-Interest Trust re­

Bulletin No. 2023–11

turns required to be filed for taxable years

ending on or after December 31, 2023.

Par. 26. Section 301.6011-14 is added

to read as follows:

§301.6011-14 Required use of

electronic form or other machinereadable form for material advisor

disclosure statements.

(a) Material advisor disclosure statements required electronically or in other

machine-readable form. (1) Any mate­

rial advisor required to file a return on

Form 8918, Material Advisor Disclosure

Statement, under §301.6111-3(a) of this

chapter must file its return electronical­

ly or in other machine-readable form,

in accordance with revenue procedures,

publications, forms, instructions, or other

guidance, including postings on the IRS.

gov website, if the material advisor is re­

quired by the Internal Revenue Code or

regulations to file at least 10 returns (as

determined under paragraph (d)(4) of this

section) during the calendar year.

(2) The Commissioner may direct the

type of electronic or other machine-read­

able form through revenue procedures,

publications, forms, instructions, or other

guidance, including postings on the IRS.

gov website. Returns filed electronically

or in other machine-readable form must

be made in accordance with applicable

revenue procedures, publications, forms,

instructions, or other guidance.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, includ­

ing postings to the IRS.gov website. The

waiver request will specify the type of

filing (that is, a return required under

§301.6111-3(a) of this chapter) and the

period to which it applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effective

551

and efficient tax administration. A sub­

mission claiming an exemption must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(3) Additional Exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

(c) Failure to file. If a material advi­

sor fails to file Form 8918 electronically

or in other machine-readable form when

required to do so by this section, the ma­

terial advisor has failed to file the return.

See section 6707 for the penalty for failure

to file the return.

(d) Meaning of terms. The follow­

ing definitions apply for purposes of this

section:

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, instructions, or other

guidance.

(2) Machine-readable form. The term

machine-readable form means any ma­

chine-readable form specifically permit­

ted under applicable regulations, proce­

dures, publications, forms, instructions, or

other guidance.

(3) Material advisor disclosure statement. The term material advisor disclosure statement means a Form 8918, Material Advisor Disclosure Statement, along

with all other related forms, schedules, and

statements that are required to be attached

to the Form 8918, including amended ma­

terial advisor disclosure statements.

(4) Calculating the number of returns. (i)

Except as provided in paragraph (d)(4)(ii)

of this section, for purposes of this section,

a material advisor is required to file at least

10 returns if during the calendar year the

material advisor is required to file at least

10 returns of any type, including informa­

tion returns (for example, Forms W-2 and

Forms 1099), income tax returns, employ­

ment tax returns, and excise tax returns.

(ii) Form 8918 is not taken into account

in calculating whether a material advisor

March 13, 2023

is required to file at least 10 returns during

a calendar year.

(e) Example. The following example

illustrates the provisions of this section:

(1) During the calendar year ending December

31, 2024, Material Advisor X was required to file one

Form 1040, U.S. Individual Income Tax Return, and

10 Forms 1099-NEC, Nonemployee Compensation.

Because Material Advisor X is required to file 11 re­

turns during the calendar year 2024, X is required

to file its Forms 8918 electronically or in other ma­

chine-readable form, in accordance with revenue

procedures, publications, forms, instructions, or

other guidance, including postings on the IRS.gov

website, during the calendar year ending December

31, 2024.

(2) [Reserved]

(f) Applicability date. The rules of this

section apply to Material Advisor Disclo­

sure Statements required to be filed after

December 31, 2023.

Par. 27. Section 301.6011-15 is added

to read as follows:

§301.6011-15 Required use of

electronic form for withholding tax

returns.

(a) Withholding tax returns required

electronically. (1) A withholding agent

required to file an income tax return on

Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign

Persons, under §1.1461-1(b) of this chap­

ter must file its return electronically if the

withholding agent is required by the Inter­

nal Revenue Code or regulations to file at

least 10 returns (as defined in paragraph

(d)(5) of this section) during the calendar

year in which the Form 1042 is required

to be filed. Notwithstanding the previous

sentence, a withholding agent that is an

individual, estate, or trust is not required

to file its Form 1042 electronically.

(2) The Commissioner may direct the

type of electronic filing and may also ex­

empt certain returns from the electronic

requirements of this section through rev­

enue procedures, publications, forms, in­

structions, or other guidance, including

postings on the IRS.gov website. Returns

filed electronically must be made in accor­

dance with the applicable revenue proce­

dures, publications, forms, instructions, or

other guidance.

(b) Exclusions from electronic-filing

requirements—(1) Waivers. The Commis­

sioner may grant waivers of the require­

ments of this section in cases of undue

March 13, 2023

hardship. One principal factor in deter­

mining hardship will be the amount, if

any, by which the cost of filing the return

electronically in accordance with this sec­

tion exceeds the cost of filing the return

on paper. A request for a waiver must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website. The waiv­

er request will specify the type of filing

(that is, a return required under §1.1461-1

of this chapter) and the period to which it

applies.

(2) Exemptions. The Commissioner

may provide exemptions from the require­

ments of this section to promote effective

and efficient tax administration. A sub­

mission claiming an exemption must be

made in accordance with applicable IRS

revenue procedures, publications, forms,

instructions, or other guidance, including

postings to the IRS.gov website.

(3) Additional exclusion. If the IRS’s

systems do not support electronic fil­

ing, taxpayers will not be required to file

electronically.

(c) Failure to file. If a withholding

agent fails to file a withholding tax re­

turn electronically when required to do

so by this section, the withholding agent

has failed to file the return. See section

6651 for the addition to tax for failure to

file a return. In determining whether there

is reasonable cause for failure to file the

return, §301.6651-1(c) and rules similar

to the rules in §301.6724-1(c)(3) (undue

economic hardship related to filing infor­

mation returns electronically) will apply.

(d) Meaning of terms. The follow­

ing definitions apply for purposes of this

section:

(1) Magnetic media or electronic form.

The terms magnetic media or electronic

form mean any media or form permitted

under applicable regulations, revenue pro­

cedures, or publications. These generally

include electronic filing, as well as mag­

netic tape, tape cartridge, and diskette, and

other media specifically permitted under

the applicable regulations, procedures,

publications, forms, or instructions.

(2) Withholding agent. The term withholding agent means a withholding agent

as defined in §1.1441-7(a) of this chapter.

(3) Withholding tax return. The term

withholding tax return means a Form

552

1042, Annual Withholding Tax Return for

U.S. Source Income of Foreign Persons,

along with all other related forms, sched­

ules, and statements that are required to

be attached to the Form 1042, including

amended and superseding returns.

(4) Special rule for partnerships. Not­

withstanding paragraph (d)(5) of this sec­

tion, a withholding agent that is a part­

nership with more than 100 partners (as

determined under §301.6011-3(d)(6)) is

required to file a return described in para­

graph (a) of this section electronically.

(5) Calculating the number of returns.

For purposes of this section, a withhold­

ing agent is required to file at least 10 re­

turns if, during the calendar year in which

the Form 1042 is required to be filed,

the withholding agent is required to file

at least 10 returns of any type, including

information returns (for example, Forms

W-2, Forms 1099, Forms 1042-S), income

tax returns (for example, Form 1042),

employment tax returns, and excise tax

returns.

(e) Special rule for returns filed by financial institutions. For rules that require

withholding agents that are financial in­

stitutions to file returns electronically, see

§301.1474-1.

(f) Applicability date. The rules of this

section apply to withholding tax returns

required to be filed for taxable years end­

ing on or after December 31, 2023.

Par. 28. Section 301.6012-2 is added to

read as follows:

§301.6012-2 Required use of electronic

form for income tax returns of certain

political organizations.

(a) Income tax returns of certain political organizations required electronically.

(1) Any organization required to file an

income tax return on Form 1120-POL,

U.S. Income Tax Return for Certain Political Organizations, under §1.6012-6 of

this chapter must file its income tax return,

along with all other related forms, sched­

ules, and statements that are required to be

attached to the Form 1120-POL, including

amended and superseding returns, elec­

tronically if the organization is required

by the Internal Revenue Code or regula­

tions to file at least 10 returns of any type

(as defined in paragraph (d)(2) of this sec­

tion) during the calendar year.

Bulletin No. 2023–11

(2) The Commissioner may direct the

type of electronic filing and may also ex­

empt certain returns from the electronic

requirements of this section through rev­

enue procedures, publications, forms, in­

structions, or other guidance, including

postings on the IRS.gov website. Returns

filed electronically must be made in accor­

dance with the applicable revenue proce­

dures, publications, forms, instructions, or

other guidance.

(b) Exclusions from electronic-filing

require

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