IRS e‑file allows tax preparers to submit returns electronically through authorized Electronic Return Originators (EROs). The system accepts current‑year returns and two prior years, including amended returns. (“IRS e‑file accepts tax returns for the current and two prior tax years… accepts amended tax returns…”)
Electronic filing is available year‑round except for a brief annual cutover period.
An e‑filed return is not considered filed until the IRS issues an acceptance acknowledgment. Taxpayers must sign electronically using a PIN.
Electronic postmarks protect timely filing when the postmark date is on or before the due date.
E‑File Mandate
Paid preparers who expect to file 11 or more individual, trust, or estate returns must e‑file. (“Paid preparers… who prepare and expect to file 11 or more… are required to file electronically.”)
Electronic Return Originator (ERO)
An ERO originates the electronic submission after receiving taxpayer authorization (Form 8879). Duties include:
- Safeguarding e‑file from fraud
- Exercising due diligence for EITC returns
- Verifying TINs
- Reviewing documents for authenticity
- Confirming addresses
- Helping avoid refund delays (“EROs must not electronically file… prior to receiving Forms W‑2, W‑2G, or 1099‑R.”)
Returns Not Eligible for e‑File
IRS e‑file cannot accept:
- Returns older than two prior years
- Fiscal‑year individual returns
- Returns requiring unsupported forms
- Returns with TINs beginning with 9 (except ATIN/ITIN)
- Returns with unusual processing conditions (“IRS cannot electronically process tax returns with rare or unusual processing conditions…”)
Form 8453 Requirements
If certain documents cannot be transmitted electronically, the ERO must mail them with Form 8453. (“ERO must submit… by attaching them to Form 8453…”)
ERO Recordkeeping
EROs must retain required records through the end of the calendar year, including:
- Form 8453 and paper attachments
- W‑2, W‑2G, 1099‑R copies
- Signed consent‑to‑disclosure forms
- Complete electronic return copy
- IRS acknowledgment files
Forms 8879 and 8878 must be retained for three years from the due date or IRS‑received date. (“Forms 8879 and 8878 must be available… for three years…”)
Electronic imaging is allowed if legibility is preserved.
Providing Information to the Taxpayer
The ERO must give the taxpayer a complete copy of the return in any mutually acceptable format. Upon request, the ERO must provide:
- Declaration Control Number (DCN)
- IRS acceptance date
- Electronic postmark (if provided)
Amended returns may or may not be eligible for e‑file depending on the year and form.
Returning Client Records
Under Circular 230 §10.28, practitioners must return all client records needed for tax compliance. Copies may be retained. Fee disputes do not eliminate the obligation to return required records. (“Practitioner must promptly return all records… necessary for the client to comply…”)
Electronic Signature Requirements
Taxpayers and preparers must sign electronically. Two PIN methods exist:
Self‑Select PIN
Requires prior‑year AGI or prior‑year PIN. May be fully paperless.
Practitioner PIN
Does not require prior‑year AGI. Requires Form 8879 signature.
Taxpayers may enter their own PIN, authorize the ERO to enter it, or use software‑generated PINs.
EROs must also sign with a PIN and should use the same PIN for the entire year.
Rejected Returns and Resolution
IRS acknowledges all transmissions as accepted or rejected.
If rejected:
- ERO must notify the taxpayer within 24 hours
- Minor corrections (≤ $50 income/AGI or ≤ $14 tax/withholding/balance due) may be resubmitted without new signatures
- If unfixable, the taxpayer must file a paper return
Perfection Periods
- 5 days to correct and retransmit electronically
- 10 days to file a paper return after rejection notice (“Electronic transmission perfection period is five calendar days…”)
Paper returns must include the rejection notice and be marked “Rejected Electronic Return – (Date)”.
Payments
Taxpayers must pay by the original due date even if filing later on paper. Payment options include:
- Electronic fund withdrawal
- EFTPS
- Check
- Credit/debit card
- Installment agreement request (“Extension… is not an extension of time to pay.”)
Refunds
Providers may not charge extra for direct deposit. Refunds may be deposited only into accounts in the taxpayer’s name. Direct deposit elections cannot be changed after IRS acceptance. (“Provider must never charge a separate fee for direct deposit…”)
Advertising Standards
Providers must follow Circular 230 rules and avoid misleading claims. They may not:
- Use “IRS” in their business name
- Advertise e‑file before receiving W‑2/1099‑R forms
- Misrepresent refund timing
- Mislabel refund‑related loans (“Provider must not use improper or misleading advertising…”)
Records of advertisements must be retained through the following calendar year.
Sanctioning
The IRS may issue:
- Reprimands
- Suspensions
- Expulsions
Infractions are categorized:
Level One
Minor issues; may result in a reprimand.
Level Two
Adverse impact on return quality; may result in restrictions or one‑year suspension.
Level Three
Significant adverse impact; may result in two‑year suspension or permanent expulsion for fraud or criminal conduct. (“Depending on the severity… could result in expulsion…”)
Sanctions generally take effect 30 days after notice unless immediate action is warranted.
Related entities may also be suspended or expelled.