SECTION 4. ACCEPTANCE — Internal Revenue Bulletin 1998-38

FORM 1040 ON-LINE FILING PROGRAM

.01 Except as provided in sections 4.02 through 4.04 of this revenue procedure, an On-Line Filer that participated in the most recent Form 1040 On-Line filing season does not have to reapply to participate in the next Form 1040 On-Line filing season. However, an On-Line Filer 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 4.11 of this revenue procedure. In addition, section 4.14 of this revenue procedure provides for the Service’s issuance of credentials necessary for participation in the Form 1040 On-Line Filing Program. .02 Applicants 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 On-Line Filing Program;

(2) the applicant has previously been denied participation in the Form 1040 OnLine Filing Program; or

(3) the applicant has been suspended from the Form 1040 On-Line Filing Program.

1998–38 I.R.B. 21 September 21, 1998

Applicants must designate that the Form 8633 is for the Form 1040 On-Line Filing Program by checking the box titled “ON-LINE FILING.”

.03 An On-Line Filer must submit a revised Form 8633 (designated for the Form 1040 On-Line Filing Program as described in section 4.02 of this revenue procedure), signed by all “Principals” and the “Responsible Official” (as described in section 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 On-Line Filer participated solely as a Software Developer in the most recent Form 1040 On-Line filing season and intends to participate as an On-Line Service Provider 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 On-Line Filer must submit either a revised Form 8633 (designated for the Form 1040 OnLine Filing Program as described in section 4.02 of this revenue procedure), or a letter containing the same information contained in a revised Form 8633, if any information on the On-Line Filer’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 On-Line Filer’s legal name; (2) the On-Line Filer’s employer identification number and/or social security number (EIN/SSN);

(3) the On-Line Filer’s “Doing Business As” (DBA) name;

(4) whether the On-Line Filer is controlled or owned by another On-Line Filer;

(5) the On-Line Filer’s controlling office name;

(6) the Electronic Transmitter Identification Number (ETIN) of the On-Line Filer’s controlling office;

(7) the Electronic Filing Identification Number (EFIN) of the On-Line Filer’s controlling office; and

(8) the business address of the OnLine Filer’s controlling office. A Principal or the Responsible Official must sign the revised Form 8633 or the letter.

.05 For applicants described in section 4.02 of this revenue procedure, the application period begins on the 1st day of August preceding the filing season during which they intend to participate in the Form 1040 On-Line Filing Program. The application period 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 On-Line Filing Program by the start of the filing season.

.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. On-Line Filers that fail to submit revised applications may be temporarily dropped from the Form 1040 On-Line Filing Program.

(1) the brand name of the software the applicant will be using, has developed, or will be transmitting, and the following information regarding the software:

(a) the name of the Software Developer for the software;

(b) the name of the Transmitter for the software;

.07 Applicants and On-Line Filers 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 described in section 4.02 that submit their applications on or before the 31st day of December preceding the filing season must submit the following information (or the name and phone number of an individual who can provide the information) to the IRS Headquarters Form 1040 On-Line Filing Program Analyst (see section 18 of this revenue procedure) no later than the 31st day of December preceding the filing season:

the electronic portion of the taxpayer’s return;

(d) whether the software can be used to file Federal/State returns;

(e) whether the software is available on the Internet and, if so, the Internet address; and

(f) the Professional Package name of the software submitted for Participants Acceptance Testing (PATS) and whether the software has successfully completed PATS;

(2) the applicant’s point of contact for matters relating to the Form 1040 OnLine Filing Program and the telephone number for the point of contact;

(3) the applicant’s customer service telephone number; and

(4) the procedures the applicant will use to ensure that no more than five returns are transmitted from one software package or from one e-mail address (see sections 5.09(2), 5.10(3), 5.10(4), and 5.11(12)). .09 Applicants described in section 4.02 that do not submit their applications on or before the 31st day of December preceding the filing season during which they intend to participate must submit the information described in sections 4.08(1) through (4) at the time they submit their applications.

.10 On-Line Filers must submit any changes to the information contained in sections 4.08(1) through (4) of this revenue procedure to the IRS Headquarters Form 1040 On-Line Filing Program Analyst by the 31st day of December preceding the next filing season.

.11 Applicants and On-Line Filers 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 On-Line Filing 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 On-Line Filer intends to participate as a Transmitter or Software Developer.

.12 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);

September 21, 1998 22 1998–38 I.R.B.

(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; and

(4) except as provided in section 4.15 of this revenue procedure, pass a suitability check that includes a credit check, a tax compliance check, and a fingerprint check.

.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 The Service will issue credentials each year to eligible applicants, On-Line Filers that do not have to reapply pursuant to section 4.01 of this revenue procedure, and On-Line Filers that comply with section 4.03 or 4.04 of this revenue procedure, provided they have first satisfactorily completed the testing described in section 4.11 of this revenue procedure if they intend to participate as a Transmitter or Software Developer. No one may participate in the Form 1040 On-Line Filing Program without the following credentials:

(1) a letter of acceptance into the Form 1040 On-Line Filing Program;

(2) an EFIN for each applicable service center; and

(3) if appropriate, an ETIN for each applicable service center.

.15 If an On-Line Filer is a Software Developer that performs no other function in the Form 1040 On-Line Filing Program but software development, no Principal or Responsible Official needs to pass a suitability check.

.16 The Service may reject an application to participate in the Form 1040 OnLine Filing 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 On-Line Filing Program;

(7) misrepresentation on an application;

(8) suspension or rejection from either the Form 1040 On-Line Filing Program, the Form 1040 Electronic Filing (ELF) Program, or the Form 1040 IRS e-file Program in a prior year;

(9) unethical practices in return preparation;

(10) stockpiling returns prior to official acceptance into the Form 1040 OnLine Filing Program (see section 5.21 of this revenue procedure);

(11) 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 On-Line Filing Program, the Form 1040 ELF Program, or the Form 1040 IRS e-file Program, or that is suspended from participating in the Form 1040 On-Line Filing Program, the Form 1040 ELF Program, or the Form 1040 IRS e-file Program. This includes any individual whose actions resulted in

the rejection or suspension of a corporation or a partnership from the Form 1040 On-Line Filing Program, the Form 1040 ELF Program, or the Form 1040 IRS e-file Program; or

(12) 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 On-Line Filing Program, the Form 1040 ELF Program, or the Form 1040 IRS e-file Program, or that is suspended from participating in the Form 1040 On-Line Filing Program, the Form 1040 ELF Program, or the Form 1040 IRS e-file Program. This includes any individual whose actions resulted in the rejection or suspension of a corporation or a partnership from the Form 1040 On-Line Filing Program, the Form 1040 ELF Program, or the Form 1040 IRS e-file Program.