IRS Publication 3112: E-file Application and Rules

IRS Publication 3112 is the guide for any tax professional or business aspiring to become an Authorized IRS e-file Provider. This document details the framework for participation in the IRS e-file program, establishing the rules, eligibility requirements, and the application process. The publication is designed to ensure that all participants in the electronic filing system meet a consistent standard of reliability and trustworthiness.

Publication 3112 is updated to reflect changes in technology, security protocols, and program administration. It provides a clear roadmap for entering the e-file system, helping prospective providers understand their potential roles and the information they must furnish to the IRS. The document also acts as a central reference point for maintaining compliance long after initial approval is granted.

Determining Your E-file Provider Role

Before initiating an application, a prospective provider must first identify their specific role within the electronic filing ecosystem as defined by the IRS. Correctly identifying your business model is a foundational step, as it dictates the specific requirements you must meet. The most common roles include:

• Electronic Return Originator (ERO): An entity that originates the electronic submission of a tax return after preparing it or collecting it from a taxpayer. This is the role most tax preparation firms assume, as they are the direct interface with the taxpayer.
• Transmitter: This provider sends the electronic return data directly to the IRS. While an ERO gathers and prepares the return, the Transmitter handles the technical communication link to the IRS systems. A single firm can act as both an ERO and a Transmitter but must be authorized for each activity.
• Software Developer: A provider that creates the tax software used to prepare and transmit electronic returns. Their software must meet specific IRS specifications and undergo rigorous testing to ensure it can correctly format and send return data.
• Online Filer: This is a type of ERO that collects tax return information from taxpayers over the internet to complete and e-file their returns.

Information and Requirements for the E-file Application

The application to become an Authorized IRS e-file Provider is completed online through the IRS e-Services portal. This electronic application requires comprehensive details about the business and its key personnel. Applicants must provide the legal business name, Employer Identification Number (EIN), and physical address of the firm. If the business operates under a different name, that “doing business as” (DBA) name must also be listed.

For each principal and responsible official associated with the application, specific personal information is mandatory. This includes their full legal name, Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), date of birth, and professional credentials if applicable, such as a CPA license or Enrolled Agent number. A responsible official is generally defined as an individual with authority over the e-file operation, who is typically the first point of contact for the IRS.

A significant part of the application process is the suitability check, which the IRS conducts on the firm and all individuals listed in the application. This background investigation verifies tax compliance history and checks for any criminal background. For most new applicants, this includes a fingerprinting requirement. Applicants who require fingerprinting will be directed to schedule an appointment with an IRS-authorized vendor through a link provided on the e-file application summary page.

The E-file Application Submission Process

After the online application is submitted, the IRS begins its internal review. The processing timeline can vary but takes about 45 days. During this period, the IRS performs the suitability and background checks on the firm and its principals, verifying tax compliance for both the business and the individuals listed.

The IRS communicates the status of the application through its e-Services portal. If the application is approved, the IRS will issue an Electronic Filing Identification Number (EFIN). This unique six-digit number identifies the provider and must be included in the transmission of all electronic returns. The EFIN is the official authorization to participate in the IRS e-file program and should be protected to prevent unauthorized use.

If the application is missing information or if the IRS requires clarification, it will contact the applicant, usually through the responsible official listed in the application. A rejection notice will be issued if the applicant is found to be ineligible. The approval and issuance of an EFIN mark the successful completion of the application process, allowing the provider to begin e-filing returns.

Responsibilities of an Authorized E-file Provider

Upon receiving an EFIN, an Authorized e-file Provider assumes a set of ongoing responsibilities outlined in Publication 3112. Maintaining good standing requires continuous adherence to all IRS rules and requirements. The primary duties include:

• Safeguarding taxpayer data: Providers must have robust security measures in place to protect all sensitive personal and financial information from unauthorized access or disclosure. This includes securing physical records and implementing digital security protocols.
• Adhering to advertising rules: Providers cannot use improper or misleading language, such as claiming a special relationship with the IRS or guaranteeing faster refunds. All advertising must be professional and clearly state the services being offered.
• Ensuring timely and accurate transmission: Returns must be submitted to the IRS on or before the filing deadline, and the data transmitted must be correct.
• Correcting rejected returns: If a return is rejected by IRS systems due to an error, the provider is obligated to notify the taxpayer and work to correct and retransmit the return promptly.