Can You Get an EFIN With a Felony Record?

An Electronic Filing Identification Number (EFIN) is a unique identifier issued by the Internal Revenue Service (IRS) to individuals or firms authorized to electronically file tax returns. This number is essential for tax professionals, often called Electronic Return Originators (EROs), who submit tax documents to the IRS for clients. Without an EFIN, a tax preparer cannot electronically transmit tax returns, a standard and often required filing method.

Understanding the EFIN

An EFIN is a six-digit identification number assigned by the IRS to firms that have completed the e-file application process. Its primary purpose is to identify authorized e-file providers, ensuring the security and integrity of the electronic tax filing system. Firms or individuals intending to electronically file tax returns for clients must obtain an EFIN. This includes tax professionals like certified public accountants (CPAs), enrolled agents, and other tax preparers who meet IRS criteria.

The EFIN is distinct from a Preparer Tax Identification Number (PTIN), which is assigned to individual paid tax preparers and required for anyone preparing federal tax returns for compensation. While a PTIN identifies the individual preparer, the EFIN identifies the firm or entity responsible for electronically transmitting returns. The EFIN belongs to the firm, not the individual, even if the firm is a sole proprietorship.

EFIN Application Process and Requirements

To obtain an EFIN, an individual or firm must complete an application process with the IRS. The initial step involves creating an IRS e-services account, which requires providing personal details such as a Social Security Number, date of birth, and adjusted gross income from a recent tax year. This account serves as the gateway for the EFIN application and other IRS online services.

Once the e-services account is established, applicants fill out the online e-file application. This application requires detailed information about the firm and all “principals” and “responsible officials.” Principals are individuals with significant authority or ownership, while responsible officials have high-level oversight. The application also requires consent for the IRS to conduct a suitability check on all listed individuals.

As part of the application, individuals who are not certified or licensed professionals (e.g., attorneys, CPAs, enrolled agents) are required to submit fingerprints for a background check. The IRS uses an electronic fingerprinting process, requiring appointments with an authorized vendor. The entire application process, including the suitability check, takes about 45 days and can extend up to 12 weeks.

The IRS Suitability Check and Criminal History

The IRS conducts a suitability check on all EFIN applicants, including principals and responsible officials, to ensure the integrity of the e-file program. This check is a review that may include a credit check, a tax compliance check, a criminal background check, and an assessment of any prior non-compliance with IRS e-file requirements. The IRS aims to protect taxpayers and the tax system by vetting those who will have access to sensitive financial data.

A felony conviction does not automatically result in disqualification from obtaining an EFIN. The IRS evaluates criminal history on a case-by-case basis, considering various factors. These factors include the nature and seriousness of the crime, the time elapsed since the conviction, and evidence of rehabilitation efforts. For example, tax-related offenses or crimes involving financial fraud are viewed with greater scrutiny due to their direct relevance to the integrity of the tax system.

The IRS’s review process assesses whether the applicant poses a risk to taxpayers or the e-file system. Applicants should provide detailed information about any criminal history, including court documents and explanations of rehabilitation. The IRS ensures that authorized e-file providers are trustworthy and compliant with tax laws and regulations.

What Happens After a Disqualification

If an EFIN application is denied, the IRS will notify the applicant in writing. This correspondence explains the reasons for the rejection. Understanding these reasons is a first step for any subsequent action. Common reasons for denial include incomplete information, failure to meet eligibility criteria, or issues identified during the suitability check.

Applicants have the right to appeal a denial decision. The appeal process requires submitting a written statement within 30 days from the date of the denial notice. This statement should professionally and factually address each point of contention raised by the IRS, providing supporting evidence or explanations. Documentation that can strengthen an appeal includes evidence of rehabilitation, character references, or information demonstrating compliance with IRS requirements.

Submitting a timely appeal is necessary, as failure to do so may result in the denial becoming final. If an appeal is not filed or is filed late, an applicant might face a waiting period of up to two years before reapplying for an EFIN. The IRS Independent Office of Appeals aims to resolve disputes fairly without litigation, offering an opportunity for applicants to challenge the decision and present their case.