A significant number of FICPA members have been expressing their concerns over the Florida Department of Revenue's (DOR) new electronic filing requirements for unemployment compensation returns (UCT-6). In response to their comments, the FICPA has been seeking a legislative remedy to the problem. In the meantime, however, the DOR has agreed not to assess any penalties for filing electronic returns during the first quarter of 2003.

To reduce the burden on taxpayers, tax preparers and DOR employees, the DOR announced that it will not impose a penalty if taxpayers or tax preparers are not able to comply with the electronic filing and payment requirements for unemployment tax filing for the first quarter of 2003. Under current law, UCT-6 returns for the first quarter of 2003 were due April 1 and are late after April 30. For more information on the DOR's announcement, please visit the department's Web site at  www.myflorida.com/dor/news.

Recently, the FICPA drafted and supported an amendment to SB 1448 that would remove the "preparer" requirement in Chapter 443.163, Florida Statutes, and limit the obligation of electronic filing to taxpayers with 10 or more employees. On March 18, the amendment and the bill passed unanimously out of the Senate Commerce Committee. However, the DOR indicated that it would not be supportive of the amendment as drafted.

In an effort to find some middle ground, the FICPA worked with the DOR on compromise language that could be agreed upon and supported by both parties. The compromise language was added to SB 1448 on April 1, and added to its House companion on April 7. However, the measure still is a long way from becoming law.

Under this new proposal, most tax preparers would not be required to enroll to file unemployment tax reports and to pay tax electronically for their clients. If the proposal is passed during the 2003 legislative session:

• It will raise the threshold for the tax preparer to file electronically from five or more returns to 100 or more returns.
• It will not change the requirement for employers with 10 or more employees to file and pay electronically.
• It will resolve the independence issue raised by the FICPA by eliminating the electronic payment requirement and penalty on tax preparers in 12-24.004(4)(g) to have clients' confidential bank information. Payments for tax due will be made directly by the taxpayer, and will not have to be made by the preparer.
• It will change the penalty provision for preparers failing to remit the UCT-6 electronically to a $10-per-report penalty instead of a penalty based on a percentage of the amount of tax due by the taxpayer.
• It will delay the effective date of the preparer requirement to the second quarterly filing (June 2003) to allow preparers to get through tax season without having to implement the new electronic provisions, and allow for data conversion software to be further researched and approved by the DOR.
• Those employers with fewer than 10 employees will only be subject to the electronic filing requirement if they utilize the services of a preparer who is obligated to file electronically (i.e., one who prepares and reports for 100 or more employers).

The latest developments on this legislative issue will be provided in upcoming issues of "FICPA NewsFlash" and on the FICPA Web site. In the meantime, if you have any feedback or questions on this issue, please call Jennifer J. Green, CAE, the FICPA's Director of Governmental Affairs, at (850) 224-2727, Ext. 201, or e-mail her at greenj@ficpa.org.