SECTION 3. DEFINITIONS

.01 Authorized IRS e-file Provider. A participant in IRS e-file is referred to as an “Authorized IRS e-file Provider.” The five categories of Authorized IRS e-file Providers are:

(1) ELECTRONIC RETURN ORIGINATOR. An Electronic Return Originator (ERO) originates the electronic submission of returns.

(2) INTERMEDIATE SERVICE PROVIDER. An Intermediate Service Provider receives tax return information from an ERO (or from a taxpayer or tax exempt organization that files electronically using a personal computer, modem or the Internet, and commercial tax preparation software), processes the return information, and either forwards the information to a Transmitter, or sends the information back to the ERO (or taxpayer or exempt organization).

(3) SOFTWARE DEVELOPER. A Software Developer develops software for the purposes of (a) formatting electronic return information according to publications issued by the Service that set forth electronic return file specifications and record layouts for tax returns; and/or (b) transmitting electronic tax return information directly to the Service.

(4) TRANSMITTER. A Transmitter transmits electronic return information directly to the Service.

(5) REPORTING AGENT. A Reporting Agent is an accounting service, franchiser, bank, service bureau, or other entity that complies with Rev. Proc. 2003–69, 2003–2 C.B. 403, and is authorized to perform one or more of the acts listed in Rev. Proc. 2003–69 on behalf of a taxpayer.

The five categories of Authorized IRS e-file Providers are not mutually exclusive.

2005–35 I.R.B. 451 August 29, 2005

have access to taxpayer information, is a tax return preparer under the definition of section 301.7216–1(b)(2). Tax return preparers are subject to criminal penalties for unauthorized disclosure or use of tax return information. See section 7216 of the Internal Revenue Code and section 301.7216–1(a). In addition, section 6713 establishes civil penalties for unauthorized disclosure or use of income tax return information by tax return preparers.

(2) Under section 301.7216–2(h), disclosure of tax return information among Authorized IRS e-file Providers for the purpose of electronically filing a return is permissible. For example, an ERO may pass on tax return information to an Intermediate Service Provider and/or a Transmitter for the purpose of having an electronic return formatted and transmitted to the Service.

.02 Other Preparer Penalties. (1) Preparer penalties may be asserted against an individual or firm meeting the definition of an income tax return preparer under section 7701(a)(36) and section 301.7701–15. Preparer penalties that may be asserted under appropriate circumstances include, but are not limited to, those set forth in sections 6694, 6695, and 6713.

(2) Under section 301.7701–15(d)(1), Authorized IRS e-file Providers are not income tax return preparers for the purpose of assessing most preparer penalties as long as their services are limited to “typing, reproduction, or other mechanical assistance in the preparation of a return or claim for refund.”

(3) If an ERO, Intermediate Service Provider, Transmitter, or the product of a Software Developer alters the income tax return information in a nonsubstantive way, this alteration will be considered to come under the “mechanical assistance” exception described in section 301.7701–15(d)(1), and will not cause an Authorized IRS e-file Provider to become an income tax preparer. A nonsubstantive change is a correction or change limited to a transposition error, misplaced entry, spelling error, or arithmetic correction.

(4) If an ERO, Intermediate Service Provider, Transmitter, or the product of a Software Developer alters income tax return information in a way that does not come under the “mechanical assistance” exception, such Authorized IRS e-file

notices. The publications and notices governing the IRS e-file Program include:

(1) Publication 1345, Handbook for Au- thorized IRS e-file Providers of Individual Income Tax Returns ;

(2) Publication 1345A, Filing Sea- son Supplement for Authorized IRS e-file Providers of Individual Income Tax Re- turns ;

(3) Publication 1346, Electronic Return File Specifications and Record Layouts for Individual Income Tax Returns ;

(4) Publication 1436, Test Package for Electronic Filers of Individual Income Tax Returns ;

(5) Publication 1437, Procedures for the 1041 e-file Program, U.S. Income Tax Return for Estates and Trusts ;

(6) Publication 1438, File Specifica- tions, Validation Criteria and Record Layouts for the 1041 e-file Program, U.S. Income Tax Return for Estates and Trusts ;

(7) Publication 1438–A, (Supplement) 1041 e-file Program, U.S. Income Tax Re- turn for Estates and Trusts ;

(8) Publication 1474, Technical Specifi- cations Guide For Reporting Agent Autho- rization For Magnetic Tape/Electronic Fil- ers and Federal Tax Depositors ;

(9) Publication 1524, Procedures for 1065 e-file Program, U.S. Return of Part- nership Income ;

(10) Publication 1525, File Specifica- tions, Validation Criteria and Record Lay- outs for the 1065 e-file Program, U.S. Re- turn of Partnership Income ;

(11) Publication 1855, Technical Speci- fications Guide for the Electronic Filing of Form 941, Employer’s Quarterly Federal Tax Return ;

(12) Publication 3112, IRS e-file Appli- cation and Participation ;

(13) Publication 3416, 1065 e-file Pro- gram, U.S. Return of Partnership Income (Publication 1525 Supplement) ;

(14) Publication 3715, Technical Speci- fications Guide for the Electronic Filing of Form 940, Employer’s Federal Unemploy- ment (FUTA) Tax Return ;

(15) Publication 3823, Employment Tax e-file System Implementation and User Guide ;

(16) Publication 4162, Modernized e-File Test Package for Forms 1120/1120S ;

(17) Publication 4163, Modernized e-File Information for Authorized IRS e-file Providers of Forms 1120/1120S ;

(18) Publication 4164, Modernized e-File Guide for Software Developers and Transmitters ;

(19) Publication 4205, Modernized e-File Test Package for Exempt Organiza- tion Filings ;

(20) Publication 4206, Modernized e-File Information for Authorized IRS e-file Providers of Exempt Organization Filings ; and

(21) Postings to the IRS web site at: http://www.irs.gov on the Internet, and published guidance in the Internal Revenue Bulletin and the Federal Register.

.02 The publications and notices listed in section 5.01 supplement this revenue procedure. A violation of any provision of these publications and notices is considered a violation of this revenue procedure and may subject an Authorized IRS e-file Provider to the sanctions provided in section 7 of this revenue procedure.

.03 The security of taxpayer accounts and personal information is a top priority for the IRS. It is the responsibility of each Authorized IRS e-file Provider to have security systems in place to prevent unauthorized access to taxpayer accounts and personal information by third parties. The Gramm-Leach-Bliley Act, codified at 15 U.S.C. §§ 6801–6827, includes rules applicable to Authorized IRS e-file Providers that are designed to ensure the security and privacy of taxpayer information. Violation of the provisions of the Gramm-Leach-Bliley Act and the implementing rules and regulations promulgated by the Federal Trade Commission, or violations of the non-disclosure rules contained in sections 6713 or 7216 or the regulations promulgated thereunder, are considered violations of this revenue procedure and may subject an Authorized IRS e-file Provider to the sanctions provided in section 7 of this revenue procedure. See section 6.01 of this revenue procedure.

.04 In addition to the responsibilities defined in 5.01, 5.02, and 5.03 above, additional Authorized IRS e-file Providers responsibilities may be defined in statutes and regulations.