What You Need to Know About Becoming an
IRS-Authorized E-file Provider
First things first, you’re working with an IRS-authorized e-file provider, right? Unless you see the following logo on the website and customer communications, you should reconsider your choice of e-file provider:
To obtain this “stamp of approval” from the IRS, a tax return preparer or tax-filing business must go through a rigorous three-step process. Let’s take a closer look at each step, so you know what’s involved and why you can put your trust in an IRS-authorized provider:
1) Create an IRS e-services account
Before a business can submit an e-file application, it must create an IRS account, which allows electronic interaction with the IRS. In addition to providing specific identification details (Social Security number and phone number), the person creating this initial account must make sure every principal and responsible staffer in the business signs up for e-services. This point person also must confirm registration within 28 days of receiving an IRS confirmation code in the mail. This verification and approval process for creating an account typically takes several days.
2) Submit an e-file application
A business can begin the application once all essential people are approved for e-services. As stated on the IRS website:
“The application process is not simple, but as a tax professional, you understand these steps are necessary to protect the integrity and security of the electronic filing system. We all have a stake in maintaining the highest standards for e-file providers.”
Because the application is so comprehensive, it can take up to 45 days for the IRS to approve it. As part of the process, the interested provider must:
- Supply identification information for the business
- Enter information about each principal and responsible official in the business
- Choose the e-file provider option (for example, a return preparer who wants to e-file for clients would select electronic return originator, or ERO)
- Enter current professional status information if the principal or responsible official is certified or licensed, such as an attorney, CPA or enrolled agent
- Note: All other individuals must provide fingerprints via a special IRS fingerprint card – these fingerprints must be captured by a trained professional, such as a local police station or commercial service
3) Pass a suitability check
The business has submitted an application and related documents. Now the IRS can conduct a suitability check on the organization and each person listed on the application as either a principal or responsible employer. This may include a credit check, tax compliance check, criminal background check and/or a check for prior noncompliance with IRS e-file requirements.
Upon this approval, the business gets an acceptance letter from the IRS with its Electronic Filing Identification Number, or EFIN. Now enrolled, the business can start offering e-filing as a fast, efficient and secure alternative to paper filing – fully backed by the IRS.