SECTION 14. ADMINISTRATIVE

REVIEW PROCESS FOR DENIAL OF PARTICIPATION IN THE ELECTRONIC FILING PROGRAM

.01 An applicant who has been denied participation in the Electronic Filing Program has the right to an administrative review. During the administrative review process, the denial of participation remains in effect.

.02 In response to the submission of a Form 8633, the appropriate district office will either (1) accept an applicant into the Electronic Filing Program, or (2) issue a proposed letter of denial that explains to the applicant why the district office proposes to reject the application to participate in the Electronic Filing Program.

.03 An applicant who receives a proposed letter of denial may respond, in writing, to the district office that issued the proposed letter of denial. The applicant’s response must address the district office’s explanation for proposing the denial to participate. The district office must receive the applicant’s response within 30 calendar days of the date of the proposed letter of denial.

.04 Upon receipt of an applicant’s written response, the district office will reconsider its proposed letter of denial. The district office may (1) withdraw its proposed letter of denial and admit the applicant into the Electronic Filing Program, or (2) finalize its proposed letter of denial and issue it to the applicant.

.05 If an applicant receives a final letter from the district office that denies the applicant participation in the Electronic Filing Program, the applicant is entitled to an appeal, in writing, to the Director of Practice.

.06 The appeal must be filed with the district office that issued the denial letter within 30 calendar days of the date of the denial letter. An applicant’s written appeal must contain a detailed explanation, with supporting documentation, of why the denial should be

any provision of this revenue procedure. Generally, the Service will advise a suspended Electronic Filer concerning the requirements for reacceptance into the Electronic Filing Program. The following reasons may lead to a warning letter and/or suspension of an Electronic Filer from the Electronic Filing Program (this list is not allinclusive):

(1) the reasons listed in section 4.14 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 Electronic Filing 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 initiate the communication of acknowledgement files to clients within two work days of receipt of the acknowledgement files from the Service;

(8) significant complaints about an Electronic Filer’s performance in the Electronic Filing Program;

(9) failure on the part of an Electronic Filer to ensure that no other entity uses the Electronic Filer’s EFIN and/or ETIN;

(10) having more than one EFIN for the same business entity at the same location (the business entity is generally the entity that reports on its return the income derived from electronic filing), unless the Service has issued more than one EFIN to a business entity. For example, the Service may issue more than one EFIN to accommodate high volumes of returns, or the filing of a Federal/State return;

(11) failure on the part of a Transmitter to include a Service Bureau’s SBIN in the transmission of a return submitted by a Service Bureau;

(12) failure on the part of an ERO to include a drop-off collection point’s CPIN as part of a return collected from a drop-off collection point;

(13) failure on the part of an Electronic Filer to cooperate with the Service’s efforts to monitor Electronic Filers and investigate electronic filing abuse;

428 1995–2 C.B.

(14) failure on the part of an Electronic Filer to properly use the standard/non-standard W–2 indicator;

(15) failure on the part of an Electronic Filer to properly use the refund anticipation loan (RAL) indicator;

(16) failure on the part of a Service Bureau or a Transmitter to include the ERO’s EFIN as part of a return that the ERO submits to the Service Bureau or the Transmitter;

(17) violation of the advertising standards described in section 12;

(18) failure to maintain and make available records as described in section 5.09(4) of this revenue procedure;

(19) accepting a tax return for electronic filing either directly or indirectly from a person (other than the taxpayer who is submitting his or her return) who is not in the Electronic Filing Program;

(20) submitting the electronic portion of a return with information that is not identical to the information on Form 8453;

(21) failure to timely pay any applicable fees, as implemented by subsequent guidance;

(22) filing returns before February 15, 1996, with any form of substitute W–2 or wage and tax documentation; or

(23) failure to timely submit a revised Form 8633 notifying the Service of changes described in section 4.04 of this revenue procedure.

.08 The Service will list in the Internal Revenue Bulletin, district office listings, district office newsletters, and on the EFS Bulletin Board the name and owner(s) of any entity suspended from the Electronic Filing Program and the effective date of the suspension.

.09 A district director may warn Electronic Filers who are using the services of a rejected or a suspended Electronic Filer that sections 4.14(11) and (12) of this revenue procedure prohibit a business relationship with a rejected or a suspended Electronic Filer. However, in appropriate circumstances, the Service may immediately suspend the Electronic Filer.

.10 Denials of applications and suspensions of participation in the Electronic Filing Program will result in:

(1) a rejected applicant not being reconsidered for participation in the Electronic Filing Program for at least two years; and

reversed. In addition, the applicant must include a copy of the applicant’s Form 8633 and a copy of the denial letter.

.07 The district office whose denial is being appealed will, upon receipt of a written appeal to the Director of Practice, forward to the Director of Practice its file on the applicant and the material described in section 14.06 of this revenue procedure that the applicant has submitted to the district office. The district office will forward to the Director of Practice these materials within 15 calendar days of receipt of the applicant’s appeal to the Director of Practice.

.08 Failure to respond within the 30day periods described in sections 14.03 and 14.06 of this revenue procedure irrevocably terminates an applicant’s right to an administrative review or appeal.