What Is an EFIN and How Do You Apply for One?

An Electronic Filing Identification Number, or EFIN, is a unique identifier issued by the Internal Revenue Service (IRS) that plays a fundamental role in the electronic submission of tax returns. This number is a prerequisite for tax professionals and firms wishing to electronically transmit tax returns to the IRS, allowing for efficient and secure electronic filing on behalf of clients.

Understanding the EFIN

An EFIN is a six-digit number assigned by the IRS to individuals or firms authorized to act as IRS e-file providers. It serves as a unique identifier for the Electronic Return Originator (ERO) who electronically submits tax returns to the IRS. This number is distinct from a Preparer Tax Identification Number (PTIN), which is an eight-digit number beginning with a “P” required for anyone who prepares federal tax returns for compensation. The EFIN identifies the entity or firm transmitting the return, while the PTIN identifies the individual tax preparer. The EFIN verifies that a provider has met the IRS’s requirements for secure and authorized e-filing.

The primary purpose of an EFIN is to identify the authorized e-file provider responsible for transmitting tax returns to the IRS electronically. It ensures that only approved entities can access and utilize the IRS e-file system. While the EFIN belongs to the firm or organization, rather than an individual, it is a necessary credential for modern tax businesses that engage in electronic tax preparation services.

Who Must Have an EFIN

Individuals and entities that electronically submit tax returns to the IRS on behalf of clients are required to obtain an EFIN. This includes tax professionals, tax preparation businesses, and other organizations that function as Electronic Return Originators (EROs), such as sole proprietors, partnerships, and corporations. Anyone who charges a fee for preparing and electronically filing tax returns must possess an EFIN.

The requirement for an EFIN extends to various types of e-file providers, such as software developers and transmitters. If a firm intends to e-file five or more returns in a tax season, an EFIN is a prerequisite.

Applying for an EFIN

Preparatory Information

Before initiating an EFIN application, applicants must complete several preparatory steps and gather specific information. The principal and responsible officials involved in the e-file operation must obtain a Preparer Tax Identification Number (PTIN). Applicants also need to establish an IRS e-services account, which serves as the portal for the EFIN application. This account requires personal details such as full legal name, Social Security number, date of birth, and adjusted gross income from a recent tax year.

The IRS conducts suitability checks on the firm and each person listed as a principal or responsible official on the EFIN application. These checks include credit, tax compliance, and criminal background checks, along with a review of any prior non-compliance with IRS e-file requirements. If the principal or responsible official is a licensed professional (e.g., attorney, CPA, or enrolled agent), they must provide their current professional status; otherwise, fingerprinting is typically required.

The Application Process

Once preparatory steps are complete and information is gathered, the EFIN application is submitted through the IRS e-services portal. Applicants log into their approved e-services account to access the online EFIN application form. The process involves inputting business structure details, personal information for principals and responsible officials, and details about the intended provider option, such as Electronic Return Originator (ERO).

Careful attention to detail is important, as discrepancies or missing information can cause delays. After all fields are accurately completed, the application is submitted electronically. The IRS typically takes approximately 45 days to process and approve an EFIN application. Upon approval, the IRS issues an acceptance letter containing the Electronic Filing Identification Number.

How an EFIN Is Used

An EFIN is used within tax preparation software to identify the Electronic Return Originator (ERO) when transmitting tax returns to the IRS. When a tax professional prepares a return for electronic submission, their EFIN is embedded within the electronic data. This unique identifier allows the IRS to track who submitted the return, ensuring accountability and maintaining the integrity of the e-filing system.

The EFIN serves as a digital signature for the tax preparation business, signifying it is an authorized IRS e-file provider. It is used for submitting returns, not for preparation itself. This mechanism helps streamline the filing process, reducing paperwork and often allowing for quicker processing of refunds for taxpayers. The EFIN facilitates secure and efficient electronic communication between tax professionals and the IRS.