SECTION 4. ACCEPTANCE IN THE

FORM 1040 IRS e-file PROGRAM

.01 Except as provided in sections 4.02 through 4.04 of this revenue procedure, an Electronic Filer or Authorized IRS e-file Provider that participated in the most recent Form 1040 ELF or Form 1040 IRS e-file filing season does not have to reapply to participate in the next Form 1040 IRS e-file filing season. However, an Authorized IRS e-file Provider that intends to participate as a Transmitter or a Software Developer must first successfully complete, for each filing season, the testing referred to in section 4.08 of this revenue procedure. In addition, sec

tion 4.15 of this revenue procedure provides for the Service’s issuance of credentials necessary for participation in the Form 1040 IRS e-file Program.

.02 Applicants and Authorized IRS e-file Providers must file a new Form 8633, Application to Participate in the IRS e-file Program, with completed fingerprint cards for the appropriate individuals, if:

(1) the applicant has never participated in the Form 1040 ELF Program or the Form 1040 IRS e-file Program;

(2) the applicant has previously been denied participation in the Form 1040 ELF Program or the Form 1040 IRS e-file Program;

(3) the applicant has been suspended from the Form 1040 ELF Program or the Form 1040 IRS e-file Program; or

(4) the Authorized IRS e-file Provider is participating in the Form 1040 IRS e-file Program and wants to operate an IRS e-file business at an additional location (except that an individual listed on the Authorized IRS e-file Provider’s application who has submitted a fingerprint card with a previously accepted application need not submit an additional fingerprint card).

.03 An Authorized IRS e-file Provider must submit a revised Form 8633, signed by all “Principals” and the “Responsible Official” (as described in sections 4.09 through 4.12 of this revenue procedure), with completed fingerprint cards for those appropriate individuals who have not submitted a fingerprint card with a previously accepted application, if:

(1) the Authorized IRS e-file Provider participated solely as a Software Developer in the most recent Form 1040 ELF or Form 1040 IRS e-file filing season, and intends to participate as an ERO, Service Bureau, or Transmitter;

(2) there is an additional Principal, such as a partner or a corporate officer, that must be listed on Form 8633;

(3) there is a Principal listed on Form 8633 that should be deleted; or (4) the Responsible Official on Form 8633 changes. .04 Except as provided in section 4.03 of this revenue procedure, an Authorized IRS e-file Provider must submit either a revised Form 8633, or a letter containing the same information contained in a revised Form 8633, if any information on the Au

1998–38 I.R.B. 9 September 21, 1998

thorized IRS e-file Provider’s Form 8633 has changed. A revised Form 8633 or letter submitted under this section should include only the changed information and the following identifying information:

(1) the Authorized IRS e-file Provider’s legal name;

(2) the Authorized IRS e-file Provider’s employer identification number and/or social security number (EIN/SSN);

(3) the Authorized IRS e-file Provider’s “Doing Business As” (DBA) name;

(4) whether the Authorized IRS e-file Provider is controlled or owned by another Authorized IRS e-file Provider;

(5) the Authorized IRS e-file Provider’s controlling office name;

(6) the Electronic Transmitter Identification Number (ETIN) of the Authorized IRS e-file Provider’s controlling office;

(7) the Electronic Filing Identification Number (EFIN) of the Authorized IRS e-file Provider’s controlling office; and

(8) the business address of the Authorized IRS e-file Provider’s controlling office. A Principal or the Responsible Official must sign the revised Form 8633 or the letter.

.05 Applicants and Authorized IRS e-file Providers described in section 4.02 of this revenue procedure must submit new applications within the following time periods:

(1) except as provided in section 4.05(2) of this revenue procedure, the application period for new applicants who intend to participate in the Form 1040 IRS e-file Program for any filing season begins on the 1st day of August preceding the filing season and continues into the filing season (see the Form 8633 instructions for the last date to file a new application); however, applications submitted after the 1st day of December preceding the filing season may not be processed in time for the applicant to participate in the Form 1040 IRS e-file Program by the start of the filing season; and

(2) if an applicant purchases an existing Authorized IRS e-file Provider’s business, a new application and proof of sale must be submitted during the period beginning 45 days before, and ending 30 days after, the date of the purchase.

.06 Revised applications described in sections 4.03 and 4.04 of this revenue procedure must be submitted within 30 days of the change(s) reflected on the revised Form 8633 or in the letter. Authorized IRS e-file Providers that fail to submit revised applications may be temporarily dropped from the Form 1040 IRS e-file Program.

.07 Applicants and Authorized IRS e-file Providers described in sections 4.02 through 4.04 of this revenue procedure must file Form 8633 (or a letter as provided in section 4.04 of this revenue procedure) with the Application Processing Center at the address listed in the instructions for Form 8633.

.08 Applicants and Authorized IRS e-file Providers described in sections 4.01 through 4.04 of this revenue procedure that intend to participate as a Transmitter or a Software Developer in the Form 1040 IRS e-file Program must first successfully complete the necessary testing at the appropriate service center(s). Such testing must be completed for each filing season during which the applicant or Authorized IRS e-file Provider intends to participate as a Transmitter or Software Developer.

.09 Each individual listed as a Principal or a Responsible Official on a Form 8633 must: (1) be a United States citizen or an alien lawfully admitted for permanent residence as described in 8 U.S.C. § 1101(a)(20) (1994);

(2) have attained the age of 21 as of the date of application;

(3) submit with Form 8633 one standard fingerprint card with a full set of fingerprints taken by a law enforcement agency, except as provided in section 4.13 of this revenue procedure;

(4) except as provided in section 4.17 of this revenue procedure, pass a suitability check that includes a credit check, a tax compliance check, and a fingerprint check; and

(5) meet any applicable state and local licensing and/or bonding requirements in connection with the preparation of tax returns and the collection of prepared returns that taxpayers intend to have electronically filed. However, if the state and local licensing and/or bonding requirements apply to a business entity, the individual(s) must demonstrate that the business entity meets the requirements.

.10 A Principal for a firm or organization includes the following:

(1) Sole Proprietorship. The sole proprietor is the Principal for a sole proprietorship.

(2) Partnership. Each partner who has a 5 percent or more interest in the partnership is a Principal of the partnership. If no partner has at least a 5 percent or more interest in the partnership, the Principal is an individual authorized to act for the partnership in legal and/or tax matters (at least one such individual must be listed on Form 8633).

(3) Corporation. The President, Vice-President, Secretary, and Treasurer of the corporation are each a Principal of the corporation.

(4) Other. The Principal for a forprofit entity that is not a sole proprietorship, partnership, or corporation, is an individual authorized to act for the entity in legal and/or tax matters (at least one such individual must be listed on Form 8633).

.11 A Responsible Official is the individual who oversees the daily operations of an Authorized IRS e-file Provider’s office. A Responsible Official may also be a Principal. As set forth in section 4.12 of this revenue procedure, a Responsible Official may be responsible for more than one office.

.12 The Responsible Official categories are:

(1) TIER I RESPONSIBLE OFFICIAL. A “Tier I Responsible Official” is a Responsible Official who does not meet the definition of a “Tier II Responsible Official.” A Tier I Responsible Official should be able to visit on a daily basis each office for which he or she is listed as a Responsible Official. A Tier I Responsible Official may be listed on a maximum of ten applications (Forms 8633).

(2) TIER II RESPONSIBLE OFFICIAL. A “Tier II Responsible Official” is an individual who has participated in the Form 1040 ELF Program or Form 1040 IRS e-file Program as a Responsible Official during at least the two most recent filing seasons and who has never been suspended from participation in the Form 1040 ELF Program or Form 1040 IRS e- file Program. A Tier II Responsible Official should be able to visit on a daily basis any office for which he or she is listed as a Responsible Official. A Tier II Responsible Official may be listed on a maxi

September 21, 1998 10 1998–38 I.R.B.

mum of twenty applications (Forms 8633). .13 In lieu of a standard fingerprint card, an individual may choose to submit evidence that the individual is:

(1) an attorney in good standing of the bar of the highest court of any State, Commonwealth, possession, territory, or the District of Columbia, and is not currently under suspension or disbarment from practice before the Service or the bar of the highest court of any State, Commonwealth, possession, territory, or the District of Columbia;

(2) a certified public accountant who is duly qualified to practice as a certified public accountant in any State, Commonwealth, possession, territory, or the District of Columbia, and is not currently under suspension or disbarment from practice before the Service or whose license to practice is not currently suspended or revoked by any State, Commonwealth, possession, territory, or the District of Columbia;

(3) an enrolled agent pursuant to part 10 of 31 C.F.R. Subtitle A; (4) an officer of a publicly held corporation; or

(5) a banking official who is bonded and has been fingerprinted within the last two years.

.14 If an Authorized IRS e-file Provider has a foreign location, the stateside contact representative will receive all Service correspondence for the foreign location relating to the Form 1040 IRS e-file Program.

.15 The Service will issue credentials each year to eligible applicants, Authorized IRS e-file Providers that do not have to reapply pursuant to section 4.01 of this revenue procedure, and Authorized IRS e-file Providers that comply with section 4.03 or 4.04 of this revenue procedure, provided they have first satisfactorily completed the testing described in section 4.08 of this revenue procedure if they intend to participate as a Transmitter or Software Developer. No one may participate in the Form 1040 IRS e-file Program without the following credentials:

(1) a letter of acceptance into the Form 1040 IRS e-file Program;

(2) an EFIN or a Service Bureau Identification Number (SBIN);

(3) if appropriate, an ETIN; and

(4) if appropriate, a Collection Point Identification Number (CPIN).

.16 The Service will not issue a letter of acceptance to an ERO to participate in any Form 1040 IRS e-file filing season if the Service did not receive and accept during the immediately preceding filing season any electronically filed returns containing the ERO’s EFIN. In addition, an ERO who has been issued a letter of acceptance for any filing season may be dropped from the Form 1040 IRS e-file Program if the Service does not receive and accept, prior to the 15th day of April of that filing season, any electronically filed returns containing the ERO’s EFIN. In either case, the Service will notify the ERO that it has been dropped from the Form 1040 IRS e-file Program and explain what steps the ERO needs to take for future participation in the program.

.17 If an Authorized IRS e-file Provider is a Software Developer that performs no other function in the Form 1040 IRS e-file Program but software development, no Principal or Responsible Official needs to pass a suitability check.

.18 If an ERO will have a Drop-Off Collection Point(s) (as defined in section 3.04 of this revenue procedure), the ERO must submit a Form 8633 that lists each Drop-Off Collection Point. By listing a Drop-Off Collection Point on Form 8633, an ERO becomes a “parent” in relation to a listed Drop-Off Collection Point.

.19 The Service may reject an application to participate in the Form 1040 IRS e-file Program for the following reasons (this list is not all-inclusive). These reasons apply to any firm, organization, Principal, or Responsible Official listed on Form 8633:

(1) conviction of any criminal offense under the revenue laws of the United States, or of any offense involving dishonesty or breach of trust;

(2) failure to file timely and accurate tax returns, including returns indicating that no tax is due (unless the applicant did not have a legal filing requirement);

(3) failure to timely pay any tax liabilities;

(4) assessment of any tax penalties; (5) suspension/disbarment from practice before the Service;

(6) disreputable conduct or other facts that would reflect adversely on the Form 1040 IRS e-file Program;

(7) misrepresentation on an application;

(8) suspension or rejection from the program in a prior year;

(9) unethical practices in return preparation;

(10) assessment against the applicant of a penalty under § 6695(g) of the Internal Revenue Code;

(11) stockpiling returns prior to official acceptance into the Form 1040 IRS e-file Program (see section 5.14 of this revenue procedure);

(12) knowingly and directly or indirectly employing or accepting assistance from any firm, organization, or individual that is prohibited from applying to participate in the Form 1040 IRS e-file Program (see section 14.09 of this revenue procedure) or that is suspended from participating in the Form 1040 IRS e-file Program (see section 13.11 of this revenue procedure). This includes any individual whose actions resulted in the rejection or suspension of a corporation or a partnership from the Form 1040 ELF Program or the Form 1040 IRS e-file Program; or

(13) knowingly and directly or indirectly accepting employment as an associate, correspondent, or as a subagent from, or sharing fees with, any firm, organization, or individual that is prohibited from applying to participate in the Form 1040 IRS e-file Program (see section 14.09 of this revenue procedure) or that is suspended from participating in the Form 1040 IRS e-file Program (see section 13.11 of this revenue procedure). This includes any individual whose actions resulted in the rejection or suspension of a corporation or a partnership from the Form 1040 ELF Program or the Form 1040 IRS e-file Program.