An Electronic Filing Identification Number (EFIN) is required for tax professionals who want to file tax returns electronically. The IRS uses the EFIN to identify firms that are authorized e-file providers. Here's an in-depth look at the EFIN application process based on IRS guidelines.

Steps to Obtain an EFIN

1. Understand EFIN Requirements

  • The EFIN is issued to the firm, not an individual.

  • All principals (owners) and responsible officials in the business must undergo a suitability check.

  • You must register as an e-file provider and comply with IRS security and privacy standards.

2. Create an IRS e-Services Account

  • Go to IRS e-Services.

  • Register: Create an account for the business and all principals/responsible officials.

    • Provide your legal name, Social Security Number, and address.

    • Answer identity verification questions based on your credit history.

  • After completing registration, wait for a confirmation email from the IRS.

3. Submit an Application to Become an Authorized e-File Provider

  • Log in to your IRS e-Services account.

  • Click on "Application to Participate in the IRS e-file Program."

  • Complete the application, which includes:

    • Business details: EIN, legal name, and address.

    • Ownership and organizational structure.

    • Principals and responsible officials’ personal information.

4. Pass a Suitability Check

  • The IRS performs a suitability check on all individuals listed in the application.

    • Checks Include:

      • Criminal background check.

      • Tax compliance (no outstanding balances or late filings).

      • Credit history review.

    • This process can take up to 45 days.

5. Receive Your EFIN

  • Once approved, the IRS will issue an EFIN, which will be associated with your firm.

  • You can track your application status through your e-Services account.

Maintaining Your EFIN

1. Annual Compliance

  • Ensure all required information in your e-Services account remains updated.

  • Review IRS Publication 1345 to stay compliant with e-file provider rules.

2. IRS Monitoring

  • The IRS monitors e-file providers to ensure adherence to security and privacy standards.

  • Providers may be subject to periodic compliance reviews.

3. Renew PTINs Annually

  • Each individual preparing tax returns must renew their Preparer Tax Identification Number (PTIN) annually.

Common Reasons for Delays or Denials

  • Incomplete application details.

  • Principals or responsible officials with unresolved tax compliance issues.

  • Failure to pass the suitability check.

Benefits of Having an EFIN

  • Ability to e-file tax returns directly, which is faster and more secure.

  • Greater credibility as an authorized IRS e-file provider.

  • Enhanced efficiency in serving clients.

Resources and References

This detailed guide ensures tax professionals have the information they need to successfully apply for an EFIN. Would you like to incorporate this into training or provide additional resources?