Notice 2011-26, Administrative Exemptions to the Specified Tax Return Preparer Electronic Filing Requirement Under Internal Reve

Part III. Administrative, Procedural, and Miscellaneous

Extension of Relief and
Procedures Under Notice
2010–30 for Spouses of
U.S. Servicemembers who
are Working in or Claiming
Residence or Domicile in
a U.S. Territory Under the
Military Spouses Residency
Relief Act
Notice 2011–16
On April 15, 2010, the Treasury De­
partment and the Internal Revenue Ser­
vice published Notice 2010–30, 2010–18
I.R.B. 650, which provides relief and
procedures for certain taxpayers who
are spouses (civilian spouses) of active
duty members of the uniformed services
(servicemembers). In particular, the pro­
cedures in Notice 2010–30 were made
available for the taxable year including
November 11, 2009 (generally, this will be
the calendar year 2009, and is referred to
hereinafter as “2009”), to civilian spouses
who (A) accompany their servicemem­
ber spouses to a military duty station in
American Samoa, Guam, the Northern
Mariana Islands (NMI), Puerto Rico, or
the U.S. Virgin Islands (USVI) (each a
“U.S. territory”) and claim residence or
domicile (tax residence) in one of the 50
States or the District of Columbia under
the Military Spouses Residency Relief Act
(MSRRA) pursuant to the procedures in
Notice 2010–30 or (B) accompany their
servicemember spouses to a military duty
station in one of the 50 States or the Dis­
trict of Columbia and claim tax residence
in a U.S. territory under MSRRA.
This notice provides that civilian
spouses described in the prior paragraph
claiming MSRRA relief for federal in­
come tax purposes for the first taxable
year beginning after November 11, 2009
(generally, this will be calendar year 2010,
and is referred to hereinafter as “2010”)
should follow the applicable procedures
described in Notice 2010–30.
The extension of time to pay federal in­
come taxes described in Part III(A)(1)(b)
of Notice 2010–30 for 2009 is available
to eligible civilian spouses described in
Part III(A)(1)(b) of Notice 2010–30 claim­

2011–17 I.R.B.

ing MSRRA relief with respect to indi­
vidual federal income tax returns filed for
2010. Such taxpayers should follow the
procedures in Part III(A)(1)(b) of Notice
2010–30 to obtain an extension of time
through October 17, 2011 to pay federal in­
come taxes for 2010.
As provided in Notice 2010–30, the
IRS has determined pursuant to section
6654(e)(3)(A) of the Internal Revenue
Code (Code) that with respect to civilian
spouses eligible for the extension of time
to pay federal income taxes described in
Part III(A)(1)(b) of Notice 2010–30, ap­
plying the addition to tax under section
6654(a) in the case of an underpayment
of estimated tax by such civilian spouses
for 2010 is against equity and good con­
science due to unusual circumstances.
Civilian spouses who obtain the exten­
sion to pay federal income taxes for 2010
provided by this notice are required to pay
interest on the amount of tax from the orig­
inal payment due date until the date the tax
is paid. Pursuant to section 6601, interest
is calculated from the prescribed payment
due date determined under section 6151
without regard to any extension to pay fed­
eral income tax, including the extension to
pay tax provided by this notice.
For the reasons discussed in Part
III(A)(2) of Notice 2010–30, the exten­
sion to pay federal income taxes described
in Part III(A)(1)(b) of Notice 2010–30 is
not available to civilian spouses claiming
tax residence in a State or the District
of Columbia under MSRRA and filing
individual federal income tax returns for
2010, who are: (A) federal employees in
American Samoa, Guam, or the USVI;
and (B) individuals working in Guam or
the NMI to whom section 935 applies.
These civilian spouses should file their
2010 federal individual income tax returns
and pay any taxes due according to the
procedures described in Part III(A)(2) of
Notice 2010–30.
Civilian spouses who accompany their
servicemember spouses to a military duty
station in one of the 50 States or the Dis­
trict of Columbia and who claim tax res­
idence in a U.S. territory under MSRRA
should follow the procedures in Part III(B)
of Notice 2010–30 with respect to their
2010 income tax returns.

720

DRAFTING INFORMATION
The principal author of this notice is
Rosy L. Lor of the Office of Associate
Chief Counsel (International). For fur­
ther information regarding this notice, con­
tact Rosy L. Lor at (202) 622–3880 (not a
toll-free call).

Administrative Exemptions
to the Specified Tax Return
Preparer Electronic Filing
Requirement Under Internal
Revenue Code § 6011(e)(3)
and Regulations Under
§ 6011(e)(3)
Notice 2011–26
PURPOSE
This notice applies to tax return prepar­
ers who are required by law to electroni­
cally file certain income tax returns for in­
dividuals, estates, and trusts. This notice
provides administrative exemptions to the
electronic filing requirement under section
6011(e)(3) of the Internal Revenue Code
and corresponding regulations.
BACKGROUND
Contemporaneously with the publica­
tion of this notice, final regulations have
been published in the Federal Register as
T.D. 9518 (76 FR 17521) on March 30,
2011 implementing the requirement under
section 6011(e)(3) that specified tax return
preparers file individual income tax re­
turns electronically if they prepare and file
the returns for taxpayers. Under section
6011(e)(3)(B) and as further defined in
§ 301.6011–7(a)(3), a specified tax return
preparer means, with respect to any cal­
endar year, any tax return preparer within
the meaning of section 7701(a)(36) and
§ 301.7701–15 who prepares any individ­
ual income tax return unless such tax re­
turn preparer reasonably expects to file 10
or fewer individual income tax returns in
the calendar year, and if a person who is a
tax return preparer is a member of a firm,
that person is a specified tax return preparer unless the person’s firm members in
the aggregate reasonably expect to file 10

April 25, 2011

or fewer individual income tax returns in a
calendar year. Solely for the 2011 calen­
dar year, a tax return preparer will not be
considered a specified tax return preparer
if the preparer reasonably expects, or if the
preparer is a member of a firm, the firm’s
members in the aggregate reasonably ex­
pect, to file fewer than 100 individual in­
come tax returns in the 2011 calendar year.
Section
6011(e)(3)(C)
and
§ 301.6011–7(a)(2) define an individual
income tax return as any return of tax
imposed by subtitle A on individuals,
estates, and trusts. This includes the
Form 1040 series of income tax returns
for individuals, the Form 1041 series of
income tax returns for estates and trusts,
and Form 990–T (Exempt Organization
Business Income Tax Return) when the
exempt organization is a trust subject to
tax on unrelated business taxable income
under section 511(b).
Under section 6011(e)(3)(A) and
§ 301.6011–7(b), any individual income
tax return prepared by a specified tax
return preparer in a calendar year must
be filed electronically if the return is
filed by the specified tax return preparer.
Section 301.6011–7(c)(1) authorizes the
IRS to grant to a specified tax return
preparer a waiver of this requirement
in the case of undue hardship. Rev­
enue Procedure 2011–25, published in
the Internal Revenue Bulletin (2011–17
I.R.B. 725) on April 25, 2011, provides
additional guidance regarding undue
hardship waiver requests. Announcement
2010–96, published in the Internal
Revenue Bulletin (2010–52 I.R.B. 936)
on December 27, 2010, provided further
guidance on electronic filing hardship
waiver request procedures for calendar
year 2011.
Section 301.6011–7(c)(2) provides
for another category of exclusion
from the electronic filing requirement,
administrative exemptions.
Under
§ 301.6011–7(c)(2), the IRS may pro­
vide administrative exemptions for certain
classes of specified tax return preparers or
types of individual income tax returns, as
the IRS determines necessary to promote
the effective and efficient administration
of section 6011(e)(3) of the Internal Rev­
enue Code and § 301.6011–7, and the IRS
may provide the criteria and procedures,
if any are necessary, for administrative
exemptions through forms, instructions,

April 25, 2011

or other appropriate guidance. This notice
sets forth the administrative exemptions to
the electronic filing requirement contained
in those sections, and these administrative
exemptions are to remain in effect until
modified or superseded.

filing threshold. Specified tax return
preparers are affected by administrative
exemptions because these preparers are
not required to electronically file any
individual income tax return that qualifies
for an administrative exemption.

DISCUSSION

Administrative Exemptions.

Scope of Administrative Exemptions.
The administrative exemptions set forth
in this notice for certain classes of spec­
ified tax return preparers apply to all tax
return preparers who fall within one of
those classes. These exemptions are in­
tended to be applicable retroactively as of
January 1, 2011, to tax return preparers
who reasonably expect to file, or if a
member of a firm whose firm’s members
in the aggregate reasonably expect to
file, 100 or more individual income tax
returns in calendar year 2011. They will
be applicable starting in 2012 to tax return
preparers who reasonably expect to file,
or if a member of a firm whose firm’s
members in the aggregate reasonably
expect to file, 11 or more individual
income tax returns in 2012 and subsequent
calendar years. An exemption, however, is
not needed for any tax return preparer who
is not required to file individual income
tax returns electronically, i.e., tax return
preparers who reasonably expect to file,
or if a member of a firm whose firm’s
members in the aggregate reasonably
expect to file, fewer than 100 individual
income tax returns during calendar year
2011 (10 or fewer in calendar year 2012
and thereafter).
The administrative exemptions set
forth in this notice for certain types of
individual income tax returns are appli­
cable to tax return preparers, specified
tax return preparers, or both, depend­
ing on the circumstances discussed in
this notice. These administrative ex­
emptions are intended to be applica­
ble retroactively as of January 1, 2011.
Tax return preparers are affected by the
administrative exemptions because a
tax return preparer’s classification as a
specified tax return preparer is based upon
the number of non-exempt individual
income tax returns the tax return preparer
reasonably expects to file in a given
calendar year, and exempt returns do not
count towards the more than 10 (100 or
more in 2011) individual income tax return

A. Exempt Preparers. The following
categories of tax return preparers and spec­
ified tax return preparers are exempt from
the electronic filing requirement under
section 6011(e)(3) and the corresponding
regulations:
1. Preparer Members of Certain Reli­
gious Groups. A tax return preparer who is
a member of a recognized religious group
that is conscientiously opposed to its mem­
bers using electronic technology, includ­
ing for the filing of income tax returns
electronically, and that has existed contin­
uously since December 31, 1950.
2. Foreign Preparers Without Social
Security Numbers. A specified tax return
preparer who is a foreign person without
a social security number and is therefore
ineligible to file electronically because
the IRS e-file program currently does not
accept foreign tax return preparers with­
out social security numbers who live and
work abroad. To qualify for this exemp­
tion, the specified tax return preparer (1)
must not be a member of a firm that is
eligible to e-file, and (2) must have ap­
plied for a PTIN and either submitted
Form 8946, PTIN Supplemental Applica­
tion For Foreign Persons Without a Social
Security Number or qualify for the relief
provided by Section 5 of Revenue Proce­
dure 2010–41, 2010–48 I.R.B. 781.
3. Certain Preparers Ineligible for IRS
e-file. A tax return preparer who is cur­
rently ineligible for the IRS e-file program
due to an IRS e-file sanction. To qualify
for this exemption, the tax return preparer
must have received a letter from the IRS
enforcing the sanction and the sanction
must be in effect for some or all of the cal­
endar year in which the individual income
tax return or returns are being filed. This
exemption ends on the date the sanction
period ends or the date the IRS accepts the
tax return preparer into the IRS e-file pro­
gram, whichever date occurs first. If, how­
ever, the tax return preparer has a pending
application for the IRS e-file program filed
with the IRS at the time the sanction period

721

2011–17 I.R.B.

ends, the exemption will continue until the
date the IRS renders a decision on the tax
return preparer’s application.
B. Exempt Individual Income Tax Re­
turns Due to Preparer’s Technological
Difficulties. The following individual
income tax returns are exempt from the
electronic filing requirement under section
6011(e)(3) and the corresponding regu­
lations, due to technological difficulties
experienced by a tax return preparer or
specified tax return preparer, as applica­
ble, who meets the identified criteria for
an exemption:
1. Rejected Returns. A return that a
specified tax return preparer attempted to
e-file but was unable to e-file because the
return was rejected and the specified tax
return preparer attempted but could not re­
solve the reject condition or code.
2. Forms or Schedules Not Supported
by Preparer’s Software Package. A return
prepared by a tax return preparer or spec­
ified tax return preparer whose e-file soft­
ware package does not support one or more
forms or schedules that are part of the re­
turn.
3. Other Technological Difficulties. A
return or returns prepared by a tax return
preparer or specified tax return preparer
who experiences a short-term inability to
electronically file the return or returns due
to some other verifiable and documented
technological problem.
C. Exempt Individual Income Tax Re­
turns Due to IRS e-file Limitations. For
all tax return preparers and specified tax
return preparers, the following individual
income tax returns and attachments to re­
turns are exempt from the electronic filing
requirement under section 6011(e)(3) and
the corresponding regulations, due to IRS
barriers or other systemic limitations that
currently prevent the returns and attach­
ments from being filed electronically:
1. Returns Currently Not Accepted
Electronically. Any individual income tax
return that is not currently accepted elec­
tronically by IRS e-file or that the IRS has
instructed taxpayers not to file electroni­
cally. This includes Form 1040–NR (U.S.
Nonresident Alien Income Tax Return),
Form 1041–QFT (U.S. Income Tax Re­
turn for Qualified Funeral Trusts), Form
990–T (Exempt Organization Business
Income Tax Return), and all amended in­
dividual income tax returns, such as Form
1040X (Amended U.S. Individual Income

2011–17 I.R.B.

Tax Return). This also includes a fiscal
year return for Form 1040 (U.S. Individ­
ual Income Tax Return) and a fiscal year
return for Form 1041 (U.S. Income Tax
Return for Estates & Trusts) for certain
periods (fiscal year Form 1041 returns
ending during any month after June 30 of
the current processing year); Form 1041
claiming a refund amount equal to or
greater than $10,000,000; Form 1041 with
a dollar amount over $99,999,999,999;
and other Forms 1041 not accepted by
IRS e-file for any other limitation listed
in IRS Publication 1437 (Procedures for
the Form 1041 e-file Program U.S. Income
Tax Returns for Estates and Trusts). See
IRS Publication 1346 (Electronic Return
File Specifications and Record Layouts for
Individual Income Tax Returns) for forms
in the Form 1040-series that the IRS cur­
rently accepts electronically. For informa­
tion on IRS.Gov, see www.irs.gov/efile/.
2. Required Documentation or At­
tachments Not Accepted Electronically.
Any required documentation or attach­
ments that the IRS does not yet provide
the capability to file electronically such
as documentation for section 6707A dis­
closures or required appraisals to support
charitable contributions are exempt. Some
returns can be filed electronically and the
attachments mailed to the IRS using a
transmittal Form 8453 (U.S. Individual
Income Tax Transmittal for an IRS e-file
Return) or Form 8453–F (U.S. Estate or
Trust Income Tax Declaration and Signa­
ture for Electronic Filing). The associated
return must be filed electronically if pre­
pared and filed by a specified tax return
preparer and otherwise capable of being
e-filed, and the attachments mailed to the
IRS using a transmittal Form 8453. See
the instructions to Form 8453 and instruc­
tions to Form 8453–F.
Exemptions are Automatic. A tax re­
turn preparer or specified tax return preparer who qualifies for an exemption de­
scribed in this notice does not have to re­
quest an exemption from the IRS or other­
wise obtain the IRS’ approval. These ex­
emptions are automatic for those who meet
the criteria provided in this notice. Al­
though there is no need to apply for an ad­
ministrative exemption or to maintain any
specific information, the burden is on the
tax return preparer or specified tax return
preparer to show entitlement to an admin­
istrative exemption, and the preparer will

722

be required to demonstrate the applicabil­
ity of an administrative exemption or ex­
emptions upon request by the IRS. Note
that undue hardship waiver requests are
unnecessary for purposes of claiming an
administrative exemption and should not
be submitted by or for an exempt specified
tax return preparer, or for an exempt indi­
vidual income tax return.
The IRS has created Form 8948, Preparer Explanation for Not Filing Electron­
ically, for specified tax return preparers to
explain why an individual income tax re­
turn that is able to be filed electronically
was prepared and filed in paper format.
Among the reasons listed, Form 8948 in­
cludes the exemptions listed in paragraphs
A. and B. of this notice. For further infor­
mation, see the instructions to Form 8948,
which, among other things, provide that
Form 8948 is to be attached to the paper
copy of the tax return that a specified tax
return preparer prepares and furnishes to
the taxpayer. Further note that returns cur­
rently not acceptable by IRS electronically
as specified in paragraph C.1. of this no­
tice do not require the use of Form 8948.
Further Information. Further informa­
tion, including Frequently Asked Ques­
tions, on the electronic filing requirement,
administrative exemptions, and undue
hardship waiver requests, is posted on
www.irs.gov.
EFFECTIVE DATE
The administrative exemptions set forth
in the notice are effective for and apply
to individual income tax returns filed after
December 31, 2010.
DRAFTING INFORMATION
The principal author of this notice is
Keith Brau of the Office of Associate Chief
Counsel (Procedure & Administration).
For specific questions regarding the elec­
tronic filing requirement, undue hardship
waiver requests, and administrative ex­
emptions, call the IRS at 1–866–255–0654
(a toll-free number); callers who are out­
side of the 50 U.S. States and/or U.S.
Territories should use the International
phone number: 1–512–416–7750 (not a
toll-free number). For further information
regarding this notice, contact Keith Brau at
(202) 622–4940 (not a toll-free number).

April 25, 2011