More than one-third of companies that are required to file their 2005 taxes electronically next year are not ready for e-filing, according to a survey by KPMG LLP.
Under the new Internal Revenue Service requirement, all companies that have assets of $50 million or more and that file at least 250 returns annually must begin filing electronically next year.
According to KPMG, just 15 percent of companies have a plan in place to satisfy the e-filing requirement; 30 percent reported that they are researching their options; 18 percent have started to evaluate alternatives. The firm also noted that the IRS has indicated that limited waivers will be granted only for extreme hardship.
“Although corporate taxpayers may think they have plenty of time to prepare for this change, they should understand that the preparation of this year’s return may require several additional weeks of lead time to transition from traditional tax return preparation processes to the single electronic return transmission required,” stated Michael Dolan, director of IRS policies and dispute resolution in KPMG’s Washington national tax practice, in a press release.
KPMG’s poll of 205 corporate tax executives found that their most significant e-filing concern involved issues related to the attachment of documentation, noted by 41 percent of respondents. Another major concern, cited by 35 percent, involved difficulties importing disparate data into one format. Security issues are not a big deal, it seems; they were cited by only 9 percent of respondents.
According to KPMG, 73 percent of respondents plan to license tax software to process and e-file their return; another 14 percent will hire a third-party preparer to handle the return or develop their own proprietary software.