An Electronic Filing Identification Number (EFIN) is an identification number given by the Internal Revenue Service (IRS) to individuals or firms that are accepted and authorized e-file Tax Service Providers. These providers need an EFIN to electronically file tax returns.
More than 90% of federal tax returns are e-filed - close to 122 million of the total tax returns each year. Using electronic filing with an EFIN helps to protect the information within them. For more information, click HERE.
The application process can be tedious, but it is in place to protect the security of the electronic filing system. The information requested is information you should already have to complete the application efficiently and correctly.
Because the application is so comprehensive, it has been designed so that you can save your data from a session, close out the session and return to it when convenient. More information on the application process is discussed below. For an informative video that explains the EFIN application, click HERE.
An Employer Identification Number (EIN) and an EFIN are not the same things. An EIN, also known as a Federal Tax Identification Number, is issued by the IRS and used to identify an employer’s tax accounts and in some cases those that do not have employees.
An EFIN is an identification number used by authorized Tax Services Preparers for the purpose of e-filing tax returns.
Because both of these numbers are important when filing taxes, it is helpful to understand their differences. An easy way to help clarify when planning a return is that the EIN is a 9-digit number while the EFIN is only a 6-digit number.
An EFIN (Electronic filing identification number) and an PTIN (Preparer Tax Identification Number) are not the same things. An EFIN, is issued to the business. A PTIN is issued to an individual who is preparing taxes. You must have an EFIN so the business can electronically filing and have a PTIN so the preparer can be identified on the return. A PTIN number starts with a P.
It is essential that you apply for and receive an EFIN before using professional tax software. A Tax Preparer needs an EFIN to electronically file tax returns. At UltimateTax we do not provide EFINs to businesses as it is an improper use of an EFIN.
Anyone filing more than 10 returns must electronically file them. This means that you will be unable to use professional tax software to e-file returns if you have not first been assigned an EFIN by the IRS.
It is important to note that if you plan on filing 9 or fewer paper tax returns in a year than you may use professional tax software to prepare your client’s tax returns without having an EFIN. However, UltimateTax does not offer tax software to those who do not already have their EFIN.
It is the combined goal of the IRS and Tax Services Providers to keep all tax related documents and information safe and secured. Authorized IRS e-file Providers must adhere to applicable IRS e-file rules and requirements to continue participating in IRS e-file. These requirements include ensuring the security of taxpayer information and complying with provisions for all e-file programs.
For more information see IRS Pub. 3112; p. 19.
Before you e-file returns, you must submit official documentation of your credentials to e-file as a Tax Preparation Provider in good standing with the IRS to UltimateTax. You can do so by either submitting an Application Summary from the IRS e-Services website or by submitting your EFIN Acceptance Letter if you received your EFIN in the last 12 months.
Letters older than 12 months will not be accepted. Below is a step-by-step breakdown of how to access your Application Summary from the IRS e-Services website.
Since January 1st, 2012, any tax return preparer who anticipates preparing and filing 11 or more tax returns during a calendar year must use IRS e-file. Tax Preparers need an EFIN to electronically file tax returns. Tax Software Providers ask for this proof to show that the office has been an approved provider to help prevent fraud.
Before submitting your EFIN Application Summary to UltimateTax, you will need to access and download it from the IRS e-Services website. Below are instructions on how to do so:
After you have saved your EFIN Application Summary, you will need to submit it to UltimateTax by following the below steps:
Visit the EFIN letter upload page Here and follow the instructions.
The requirements for EFIN verification with the IRS are:
For more information see IRS Pub. 3112; p. 21.
Checking the status of your EFIN Application through the IRS e-Services site is simple. Below are step-by-step instructions on how to do so:
For more information on how to check the status of your EFIN Application, click HERE.
E-filing is a service that has become an expectation amongst taxpayers. The use of e-filing has safely and securely transmitted more than 1 billion tax returns since 1990 to the IRS.
The steps below outline what you need to do to apply for an EFIN so that you can begin e-filing. For more information about applying for an EFIN, click HERE.
Before starting, you will need to confirm that you are eligible to apply for an EFIN based off the following criteria:
After you have confirmed eligibility and before you can begin the online e-file application, you must first have an e-services account that will facilitate electronic interaction with the IRS. All e-services users must register using a two-factor authentication process called Secure Access.
When you apply for an e-services account, you must first provide your legal name, Social Security Number (SSN), date of birth, phone number, email address and your home mailing address. After you will need to provide your Adjusted Gross Income from the current or prior tax year.
You will then be prompted to create a username, a password, and a PIN and provide an answer to a question to recover your username. It is important that you make sure that every Principal and Responsible Official in your firm signs up for e-services account.
After you have created your account, you can then begin your application to become an authorized e-file Provider online through IRS e-services. Keep in mind that an e-services registration can take as long as 28 days to process.
Choosing to use the online application to become an authorized e-file Provider has many advantages you will want to know. First, it makes it easier and faster to correct mistakes by catching errors during data entry and it validates your data against IRS databases. Also at any time, you can review the status of your application online.
The application to become an authorized IRS e-file Provider will ask for basic information about your firm, key individuals, and the preparer options you have chosen. You must also enter professional status for all principals and responsible officials.
You will need to get a finger print card from the IRS. You can get a fingerprint card by calling 866-255-0654. One set of fingerprint cards is needed for each principal and responsible official. New fingerprint cards are not required for those who have submitted them before with another active application.
Keep in mind that the IRS cannot approve your application until you have submitted all of the required information.
Once your application is approved, you can easily update your information online as well. As an authorized e-file Provider, it's your responsibility to keep the information in your application up to date.
After submitting your application and any additional documents, the IRS will perform a suitability check on your firm. Those considered the principal or responsible official who are listed on your application.
Included in the suitability check are the review of credit, tax compliance, criminal background, and any prior non-compliance with IRS e-file requirements.
It can take the IRS up to 45 days to process the application and complete the suitability check. In extreme cases we have seen it take up to 12 weeks.
All principals and responsible officials of your firm must pass the suitability check before your application will be accepted. If the firm or an individual fails the suitability check, your application will be rejected. If your application is rejected, you will be notified in writing by the IRS.
You will then get an acceptance letter from the IRS with your EFIN after you have been approved. As an authorized Tax Preparation Provider, you may then perform a variety of e-filing activities.
It takes the IRS about 45 days to process the EFIN application and complete the suitability checks. In extreme cases we have seen it take up to 12 weeks.
There is not a fee for applying for and obtaining an EFIN.
No. Your EFIN does not expire. Though if you do not use your EFIN it will be revoked. So, use it or lose it.
“Authorized IRS e-file Providers do not have to reapply or renew each year as long as you continue to e-file returns. However, if you do not e-file returns for two consecutive years, the IRS will notify you of removal from the IRS active list. The IRS may reactivate a tax preparer if the they reply within sixty days and requests reactivation. Otherwise, the firm will have to complete and submit a new application.”
The owner of the EFIN is the firm the EFIN is assigned to by the IRS.
According to the IRS, your application should include an individual known as a Responsible Official who has authority over the firm’s IRS e-file operation at the location the EFIN has been assigned.
This individual is considered the primary form of contact between the firm and the IRS; they sign any revised e-file applications from the IRS; and they are responsible for all returns that are e-filed from the location the EFIN has been assigned.
Also included in your application should be Principals who are authorized to act for the entity in legal and/or tax matters. Examples would include the Sole Proprietor if they are the Principal; a Partnership would list partner’s with 5% or more interest in the partnership; and a Corporation would list the President, Vice-President, Secretary and Treasurer.
Because of the security of your EFIN and to keep it from becoming compromised, you may not transfer your EFIN for any reason.
The IRS will determine if further action is required after reviewing the situation. Further action includes a fraud referral.
Examples of invalid use includes using an EFIN that is not associated with your firm; using one that a previous employer-owned; or using one from a firm that has changed its structure making it different from the application.
Of course, there are many items that have to be followed once you get an EFIN. The best references are Publication 1345 and Publication 230.
For additional help, you can contact the IRS EFIN Phone Number for Tax Professionals - 866-255-0654 (6:30 AM to 6 PM CT) or visit the IRS.gov website located HERE.