Section 20. Preparer e-file Hardship Waiver Requests

(1) This transmits revised IRM 3.42.20, Electronic Tax Administration, Preparer e-file Hardship Waiver Requests.

Material Changes

(1) Editorial changes, including replacing Wage and Investment with Taxpayer Services, updating dates in examples and updating form types, were made throughout the IRM.

Effect on Other Documents

IRM 3.42.20, Preparer e-file Hardship Waiver Requests, dated October 7, 2022 (effective October 7, 2022) is superseded.

Audience

Taxpayer Services, Electronic Products and Services Support, Small Business/Self-Employed, Return Preparer Office

Effective Date

Charlotte A. Trout
Acting Director, Electronic Products and Services Support
Taxpayer Services

Program Scope and Objectives

1. This Internal Revenue Manual (IRM) provides the basis for the Electronic Products and Services Support (EPSS) employee to respond to e-File Hardship Waiver questions and how to process them.
2. The e-File Hardship Waiver excludes preparers from e-filing, even though they are normally required to do so.
3. E-file Provider Program Management (EPPM) is responsible for the maintenance of the waiver database.

Background

1. This IRM provides Electronic Products and Services Support (EPSS) with procedures for generating and issuing e-File Hardship Waivers.

Authority

1. Internal Revenue Code (IRC) 6011(e)(3) is the authority for the procedures in this Internal Revenue Manual (IRM).

Roles and Responsibilities

1. Director of Electronic Products and Services Support (EPSS) is responsible for approving the policies and guidance.
2. Chief of E-file Provider Program Management is responsible for the development and delivery of policy and guidance that impacts assistors.

Acronyms and Terms

1. Preparer Waiver Request (PWR)
2. Electronic Products and Services Support (EPSS)
3. Internal Revenue Code (IRC)
4. Internal Revenue Manual (IRM)

e-file Hardship Waivers

1. IRC 6011(e)(3) states that all tax return preparers who reasonably expect to file or whose firm reasonably expects to file, in the aggregate, 11 or more individual income tax returns, must file electronically. Current tax forms covered by the e-file requirement are Form 1040, Form 1040NR, Form 1040SR and Form 1041.
2. The IRS will waive the electronic filing requirement under certain circumstances. Preparers must request a waiver using Form 8944, Preparer e-file Hardship Waiver Request. See IRM 3.42.20.4 , Form 8944, Preparer e-file Hardship Waiver Request.
3. Waiver requests are approved on a case-by-case basis and are valid for a period of one calendar year.

Administrative Exemptions

1. If a return preparer meets one of the administrative exemptions shown below, they do not have to electronically file, nor should they submit Form 8944, Preparer e-file Hardship Waiver Request.
2. The following are administrative exemptions to the e-file mandate requirement:

• Preparer Members of Certain Religious Groups - The preparer is a member of a recognized religious group that is conscientiously opposed to filing electronically.
• Foreign Preparers without Social Security Numbers - The preparer is ineligible to file electronically because the IRS does not accept foreign preparers without social security numbers who live and work abroad.
• Certain Preparers Ineligible for IRS e-file - The preparer is ineligible to participate in IRS e-file due to an IRS sanction. This exemption ends on the date the sanction period ends or the date the IRS accepts the return preparer into the IRS e-file program, whichever date occurs first.
• Exempt Individual Income Tax Returns Due to Preparer’s Technological Difficulties:

1. Rejected returns - return rejected for IRS e-file and the preparer could not resolve the reject condition.
2. Forms or Schedules Not Supported by Preparer’s Software Package - The preparer’s e-file software package does not support a form or schedule attached to the return.
3. Other Technological Difficulties - short-term inability to e-file due to some other verifiable and documented technological problem.

1. Search the Preparer Waiver Request (PWR) Database for a prior or current year waiver.

• If prior year waiver found, see IRM 3.42.20.4.5 , Prior Year Waivers on File.
• If current year, see IRM 3.42.20.4.4 , Reconsiderations.

Note:

See an explanation of sequence numbers in IRM 3.42.20.4.1, Processing Form 8944, Preparer e-file Hardship Waiver Request.

Form 8944, Preparer e-file Hardship Waiver Request

1. Form 8944, Preparer e-file Hardship Waiver Requests, must be submitted between October 1 and February 15. For example, if the preparer is requesting a waiver for calendar year 2025, the request must be submitted between October 1, 2024 and February 15, 2025.

Note:

Department of Treasury, Internal Revenue Service
310 Lowell Street
Stop 983
Andover, MA 01810

Note:

Any Form 8944 submitted after February 15 must include a statement explaining the reason(s) why the request was late. The delay must be due to unusual or unforeseen and unavoidable circumstances, and if not, the request will be denied and form returned.

Processing Form 8944, Preparer e-file Hardship Waiver Request

1. Review Form 8944 to ensure all required fields are completed. The following must be completed or included:

• Lines 2, 3, 6, 7, 8, and 9 (if 7b, 7c or 7d is checked)

Note:

When the applicant is a preparer in a firm and expects to file 11 or more returns and question 5 is answered "Yes" 6(iv) must be completed. In addition, the Preparer Tax Identification Number (PTIN) on Line 3 must be in a valid format of PXXXXXXXX.

If any required information is missing, see IRM 3.42.20.4.2 , Incomplete Form 8944, Preparer e-file Hardship Waiver Request.

• If a waiver is found for a prior year, see IRM 3.42.20.4.5 , Prior Year Waivers on File.
• If a duplicate request is found for the current year that has been processed, file Form 8944 with the first.
• If a different existing request is found for the current year, follow the instructions in IRM 3.42.20.4.4 , Reconsiderations.

Note:

Sequence numbers are assigned differently for waivers received for a prior year. The first two digits are 99. The second two digits are the year of the waiver (i.e., 23 for a 2024 waiver or 24 for a 2025 waiver.)

Incomplete Form 8944, Preparer e-file Hardship Waiver Request

1. All submitted Forms 8944 must be entered into the PWR database. If the application is incomplete, enter the customer information that is provided from Form 8944.
2. Highlight the lines with incomplete information on Form 8944. Return the highlighted form with the incomplete letter generated from the PWR Database.
3. Compare the waiver number on Form 8944 with the letter to ensure accuracy. Upon completion, document the waiver history sheet with the waiver number and the date returned to the preparer. File the Form 8944 along with a copy of the letter issued in waiver number order and attached to the waiver history sheet. For an explanation of waiver sequence numbers, see IRM 3.42.20.4.1 .
4. The preparer must return the completed Form 8944 within 30 days from the date of the incomplete letter.

• If no response is received from the preparer no further action will be taken by EPSS.
• If the response is received after the allowed 30 day window, generate Letter 4654 with paragraph “d3b”.