§ 301.6011-13 - Required use of electronic form for split-interest trust returns.

§ 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 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 exempt certain returns from the electronic requirements of this section through revenue procedures, publications, forms, instructions, or other guidance, including postings on the IRS.gov website. Returns filed electronically must be made in accordance with applicable revenue procedures, publications, forms, or instructions.

(b) Exclusions from electronic-filing requirements -

(1) Waivers. The Commissioner may grant waivers of the requirements 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 return 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 waiver request will specify the type of filing (that is, a return required under § 53.6011-1 of this chapter) and the period to which it applies.

(2) Exemptions. The Commissioner may provide exemptions from the requirements of this section to promote effective and efficient tax administration. 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 filing, 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 to the rules in § 301.6724-1(c)(3) (undue economic hardship related to filing information returns electronically) will apply.

(d) Meaning of terms. The following 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 procedures, or publications. These generally include electronic filing, as well as magnetic 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 related 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 required 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, including information returns (for example, Forms W-2 and Forms 1099), income tax returns, employment tax returns, and excise tax returns. In the case of a short-period 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 returns of any type, including information returns (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 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 December 31, 2023.

(2) [Reserved]

(f) Applicability date. The rules of this section apply to Split-Interest Trust returns required to be filed for taxable years ending on or after December 31, 2023.

[T.D. 9972, 88 FR 11772, Feb. 23, 2023]