Here's a question that has been posed to me in the last week by several people who do their own New York tax returns on paper and got a nasty surprise when they went to the state website to download the forms.
This year, New York has modified its fill-in pdf forms for paper filing so as to autocomplete certain fields, including certain basic addition/ subtraction calculations and inserting the appropriate standard deduction and net tax due amounts based on the other figures typed in by the user. When completed, the forms also display barcodes representing the data thereon, for use by the tax department scanners. (The previous fill-in forms in which all fields were manually entered, without any calculations or other functions, have been eliminated and replaced with simple page images which one has to print out and fill in by hand.)
The question now is, do these enhanced forms constitute "a tax preparation application hosted by the Tax Department" as included in the definition of "tax software" shown on its website, the use of which triggers the perpetual e-file mandate not just for preparers but for individual taxpayers. The actual state law Sec. 698(g)(10)(B)(iv) reads only: ""Tax software" means any computer software program intended for tax return preparation purposes", while the tax department itself has expanded upon that definition on its own, though I don't know if anyone has tested those changes.
While it was evident that the previous forms did not constitute software programs, merely a means for the user to produce a more legible page in these post-typewriter days, it's a bit blurry as to whether these enhanced forms are that much different from TurboTax or its ilk, since even if most of the fields are manually entered, in the end there are some calculations/lookups and the result is a fileable return (or pages thereof). I'm sure, if asked directly, the Tax Department would define them as such a hosted application as a matter of its own self-interest and its wish to have everyone e-file everything, but the whole point of these forms is for use by people who can't or won't e-file for whatever reason and don't want to get caught in the e-file mandate for the rest of their lives, so why would they bother to still provide them at all if not to allow for such paper filings?
Has anyone out there had occasion to either make such inquiries or test a similar situation in another jurisdiction in which a definitive ruling was obtained either way?