What Is an Electronic Filing Identification Number?
Navigate the Electronic Filing Identification Number (EFIN). Get insights into its role, who requires it, and the steps to obtain and effectively use this IRS credential.
An Electronic Filing Identification Number (EFIN) is a unique six-digit identifier issued by the Internal Revenue Service (IRS) to individuals or firms authorized to submit tax returns electronically. This number serves as a digital signature, allowing the IRS to identify and track the origin of each electronically filed return. The primary purpose of an EFIN is to enhance the security and integrity of the electronic tax filing system by ensuring that only approved tax professionals can transmit returns. It streamlines the tax preparation process by enabling electronic transmission, reducing paperwork, and often accelerating refund delivery for taxpayers.
Who Needs an EFIN
An EFIN is generally necessary for tax professionals, accounting firms, and other entities that prepare and electronically submit tax returns on behalf of clients. Federal legislation enacted in 2011 mandates that anyone filing more than 10 returns annually must do so electronically, making an EFIN a requirement for many preparers. This includes sole proprietors, small businesses, and large accounting firms offering electronic filing services.
It is important to distinguish an EFIN from a Preparer Tax Identification Number (PTIN). While a PTIN identifies individual tax preparers who are compensated for their services, an EFIN is specifically linked to the capability of electronically transmitting returns to the IRS.
Applying for an EFIN
The process of applying for an EFIN involves several steps, primarily conducted online through the IRS e-services website. Before initiating the application, prospective e-file providers must create an IRS e-services account. This account requires personal details such as a Social Security Number, date of birth, and adjusted gross income from a prior tax year.
Once the e-services account is active, applicants can submit the online e-file application. The application requires detailed information about the business structure, location, contact information, and specifics for all principals and responsible officials within the organization. A suitability check is a mandatory part of the application process, which may include a credit check, a tax compliance review, a criminal background check, and an assessment of prior adherence to IRS e-file requirements.
Individuals listed on the application must also undergo fingerprinting through an IRS-authorized vendor. The entire application process, including suitability checks, typically takes around 45 days. There is no fee charged by the IRS to apply for an EFIN.
Using an EFIN
Once an EFIN is obtained and approved, its primary function is to facilitate the electronic transmission of tax returns to the IRS. The EFIN is integrated into tax preparation software or electronic filing systems, serving as the unique identifier for the electronic sender. This integration ensures that the IRS can accurately identify which authorized provider transmitted a particular return.
EFIN holders have ongoing responsibilities to maintain compliance with IRS e-file rules and security requirements. This includes safeguarding the EFIN and associated passwords from unauthorized use. It is also important to keep the e-file application information current, updating any changes in individuals, addresses, or phone numbers to avoid EFIN deactivation. Monitoring EFIN activity through the IRS e-services account allows providers to verify the number of returns filed under their EFIN, helping to identify any unauthorized usage. An EFIN is not transferable, meaning a new application is necessary if a business is sold or expands to new physical locations where transmissions will occur.