SECTION 13. MONITORING AND

SUSPENSION OF AN AUTHORIZED IRS e-file PROVIDER

.01 The Service will monitor an Authorized IRS e-file Provider for conformity with this revenue procedure. Before suspending an Authorized IRS e-file Provider, the Service may issue a warning letter that describes specific corrective action for deviations from this revenue procedure. However, the Service can immediately suspend, without notice, an Authorized IRS e-file Provider from the Form 1040 IRS e-file Program. In most circumstances, a suspension from participation in the Form 1040 IRS e-file Program is effective as of the date of the letter informing the Authorized IRS e-file Provider of the suspension.

.02 If a Principal or Responsible Official is suspended from the Form 1040 IRS e-file Program, every entity that listed the suspended Principal or Responsible Official on its Form 8633 may also be suspended.

.03 The Service will monitor the Authorized e-file Provider’s compliance with the provisions of section 6695(g) (relating to the due diligence requirements for returns claiming the earned income credit).

.04 The Service will monitor the timely receipt of Forms 8453, as well as their overall legibility.

.05 The Service will monitor the quality of an Authorized IRS e-file Provider’s transmissions throughout the filing season. The Service will also monitor the electronic portion of returns and tabulate rejections, errors, and other defects. If quality deteriorates, the Authorized IRS e-file Provider will receive a warning from the Service.

.06 The Service will monitor Drop-Off Collection Points and advise a parent of any Form 1040 IRS e-file Program violations the Service has encountered with a parent’s Drop-Off Collection Point. If a parent fails to correct a Drop-Off Collection Point problem, the parent will be required to eliminate that Drop-Off Collection Point. Failure to take corrective action or eliminate a Drop-Off Collection Point may cause the Service to suspend the parent from participating in the Form 1040 IRS e-file Program. .07 The Service will monitor complaints about an Authorized IRS e-file Provider and issue a warning or suspension letter as appropriate.

.08 The Service reserves the right to suspend an Authorized IRS e-file Provider from participation in the Form 1040 IRS e-file Program for violating any provision of this revenue procedure. Generally, the Service will advise a suspended Authorized IRS e-file Provider concerning the requirements for reacceptance into the Form 1040 IRS e-file Program. The following reasons may lead to a warning letter and/or suspension of an Authorized IRS e-file Provider from the Form 1040 IRS e-file Program (this list is not all-inclusive):

(1) the reasons listed in section 4.19 of this revenue procedure;

(2) deterioration in the format of individual transmissions;

(3) unacceptable cumulative error or rejection rate;

(4) untimely received, illegible, incomplete, missing, or unapproved substitute Forms 8453;

(5) stockpiling returns at any time while participating in the Form 1040 IRS e-file Program;

(6) failure on the part of a Transmitter to retrieve acknowledgement files within two work days of transmission by the Service;

(7) failure on the part of a Transmitter to provide an ERO or Service Bureau with acknowledgement files within two work days after receipt from the Service;

(8) significant complaints about an Authorized IRS e-file Provider’s performance in the Form 1040 IRS e-file Program;

(9) failure on the part of an Authorized IRS e-file Provider to ensure against the unauthorized use of its EFIN and/or ETIN;

1998–38 I.R.B. 17 September 21, 1998

(22) failure to comply with a provision of an implementing document for any pilot program in which the Authorized IRS e-file Provider is a participant (see section 18 of this revenue procedure).

.09 The Service may list in the Internal Revenue Bulletin, district office listings, district office newsletters, and the EFS Bulletin Board the name and owner(s) of any entity suspended from the Form 1040 IRS e-file Program and the effective date of the suspension.

.10 A district director may warn Authorized IRS e-file Providers that are using the services of a rejected or a suspended Authorized IRS e-file Provider that sections 4.19(12) and (13) of this revenue procedure prohibit a business relationship with a rejected or a suspended Authorized IRS e-file Provider. However, in appropriate circumstances, the Service may immediately suspend the Authorized IRS e-file Provider without such warning.

.11 If an Authorized IRS e-file Provider is suspended from participating in the Form 1040 IRS e-file Program, the period of suspension includes the remainder of the calendar year in which the suspension occurs plus the next two calendar years. A suspended participant may submit a new application for the application period immediately preceding the end of the suspension.