Chapter 4 – Transmission

“Safeguarding taxpayers and IRS e-file from identity theft refund fraud requires that providers be diligent in detecting and preventing identity theft fraud patterns and schemes. Early detection of these patterns and schemes is critical to stopping them and their adverse impacts, and to protecting taxpayers and IRS e-file . Providers who transmit more than 2,000 individual income tax returns per year are required to perform analysis to identify potential identity theft fraud patterns and schemes, and to provide the results relative to any indicators of such fraud to the IRS on a weekly basis, in accordance with requirements that will be distributed to Providers.”

In fulfilling the requirements of a Provider participating in IRS e-file, Transmitters must:

1. Transmit all electronic portions of returns to the appropriate IRS center within three calendar days of receipt;

Note: This requirement does not apply when the IRS isn’t accepting specific returns, forms, or schedules until a date later than the start-up of IRS e-file due to constraints such as late legislation, programming issues and controlled validation activities, etc. Controlled validation activities are when the IRS provides special instructions to Transmitters relating to the submission of certain returns.

2. Retrieve the acknowledgment file within two workdays of transmission;

3. Match the acknowledgment file to the original transmission file and send the acknowledgment file containing all conditions on accepted returns, including non-receipt of Personal Identification Number (PIN), etc., to the Electronic Return Originator (ERO) or Intermediate Service Provider within two workdays of retrieving the acknowledgment file;

4. Retain an acknowledgment file received from the IRS until the end of the calendar year in which the electronic return was filed;

5. Contact the IRS at its e-help number, 866-255-0654, for further instructions if an acknowledgment of acceptance for processing has not been received within two workdays of transmission or if an acknowledgment for a return that was not transmitted on the designated transmission is received;

6. Promptly correct any transmission error that causes an electronic transmission to be rejected;

7. Contact the IRS at its e-help number, 866-255-0654, for assistance if the electronic portion of the return has been rejected after three transmission attempts;

8. Ensure the security of all transmitted data;

9. Ensure against the unauthorized use of its Electronic Filing Identification Number (EFIN) or Electronic Transmitter Identification Number (ETIN). A Transmitter must not transfer its EFIN or ETIN by sale, merger, loan, gift or otherwise to another entity;

10. Use only software that does not have an IRS assigned production password built into the software;

11. Provide the Device ID from the equipment used to prepare the return; and

12. Perform analysis to identify potential identity theft fraud patterns and schemes for providers who collectively transmit more than 2,000 individual income tax returns per year. They must provide the results relative to any indicators of such fraud to the IRS on a weekly basis, following requirements that will be distributed to Providers.

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Additional Requirements for Transmitters Participating in Online Filing

In addition to requirements of all Transmitters in the IRS e-file Program, a Transmitter that participates in Online Filing has some additional responsibilities.

When participating in Online Filing, the Transmitter must:

1. Ensure that it includes their assigned Online Filing EFIN, which begins with 10, 21, 32, 44 or 53, in the proper field in the electronic return data;

2. Ensure that the Intermediate Service Provider’s EFIN is included in the electronic return data, when applicable;

3. Include the assigned Submission ID in the transmission of the electronic return data to the IRS;

4. Notify the taxpayer of the status of a return by sending an electronic transmission to the taxpayer or the Intermediate Service Provider, when applicable, within two workdays of retrieving the acknowledgment file from the IRS or by mailing a written notification to the taxpayer within one work day of retrieving the acknowledgment file;

5. Ensure that it doesn’t accept transmission for more than five electronic returns originating from one software package or from one e-mail address;

6. Provide the Internet Protocol (IP) information (public/routable IP Address, IP Date, IP Time and IP Time Zone of the computer the taxpayer uses to submit the return);

7. Enter into agreements with companies to allow access to Online Filing only if companies correctly capture the IP Address of the computer submitting the return and the date, time and time zone of the computer receiving it;

8. Include “Online Filer” in the “Originator Type” field of the Trans Record “A.”

The Transmitter must notify the taxpayer of the following if the IRS accepts the electronic part of a taxpayer’s return:

• The date the transmission was accepted;

• The Submission ID (SID);

• The requirement to properly complete and timely submit a Form 8453, if required, with accompanying paper documents;

• The appropriate submission processing center’s address to which Form 8453 with accompanying paper documents, if required, must be sent; and

• The IRS must receive a Form 8453, if required, before an Online filed return is complete.

The Transmitter must tell the taxpayer of the following if the IRS rejects the electronic part of a taxpayer’s return:

• The IRS rejected the electronic part of the taxpayer’s return;

• The date of the rejection;

• The definition(s) of the applicable business rule(s);

• The steps the taxpayer needs to take to correct the errors that caused the rejection; and

• The taxpayer must file a paper return if the taxpayer chooses not to have the electronic part of the return corrected and transmitted to the IRS, or, if the IRS can’t accept the electronic portion of the return for processing by the IRS. To timely file a paper return, the taxpayer must file it by the later of the due date of the return or 10 calendar days after the date the IRS gives notification that it has rejected the electronic portion of the return or that it can’t accept the return for processing. Taxpayers should include an explanation as to why they are filing the paper return after the due date.

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A Transmitter that receives returns from an Intermediate Service Provider for Online Filing must follow the same requirements as a Transmitter that receives returns from Intermediate Service Providers for an ERO.

A Transmitter may provide an electronic postmark to taxpayers that file Individual Income Tax Returns and Extensions of Time to File Individual Income Tax Returns, through an ERO or through Online Filing. The Transmitter creates the electronic postmark bearing the date and time (in the Transmitter’s time zone) that the return is received at the Transmitter’s host computer. The taxpayer must adjust the electronic postmark to the time zone where the taxpayer lives to determine the postmark’s actual time. For example, if the Transmitter provides an electronic postmark with a time in the Pacific Time Zone but the taxpayer resides in the Eastern Time Zone, the taxpayer must add three hours to the postmark time to determine the actual postmark time (Eastern Time Zone).

If the electronic postmark is on or before the prescribed deadline for filing, but the IRS receives the return after the prescribed deadline for filing, the IRS treats the return as timely filed. For the IRS to treat a return as timely filed, based on the electronic postmark’s date, the taxpayer must meet all requirements for signing the return and when applicable, mailing Form 8453 with supporting documents not included in the electronic record. If the electronic postmark is after the prescribed deadline for filing, the IRS actual receipt date, not the date of the electronic postmark, is the filing date. If the IRS rejects a return, the taxpayer must file a corrected return following the rules for timely filing corrected returns after rejection of an electronic return.

The IRS authorizes a Transmitter to provide an electronic postmark if the Transmitter:

• Creates an electronic postmark bearing the date and time (in the Transmitter’s time zone) the return was received by the Transmitter’s host system;

• Provides the electronic postmark to the taxpayer or the ERO no later than when the acknowledgment is made available to the taxpayer in a format that precludes alteration and manipulation of the electronic postmark information;

• Provides the same electronic postmark data to the IRS in the electronic record of the return;

• Provides taxpayers with an explanation of the electronic postmark and when the IRS treats the electronic postmark as the filing date;

• Refrains from using terms that currently have specific meaning in the postal industry such as “certified” or “registered” and similar terms, and from using “Internal Revenue Service”, “IRS” or “Federal” as a definer of the electronic postmark when discussing the electronic postmark, including in all advertising, product packaging, articles, press releases and other presentations;

• Retains a record of each electronic postmark until the end of the calendar year and provides the record to the IRS upon request;

• Transmits all tax returns and extensions of time to file that received an electronic postmark to the IRS within two days of receipt from the ERO or from the taxpayer in the case of Online Filing; and

• Retains the original electronic postmark of the rejected return for a corrected return that the Transmitter received through the last date for retransmitting rejected returns and creates a new postmark for all returns, including corrected returns received after the last date for retransmitting returns. All corrected returns retaining an electronic postmark of a date through the prescribed last day of filing must be transmitted to the IRS within two days of the date the return was received by the Transmitter or the twenty second day of the respective month of the prescribed due date, whichever is earlier.

If Providers take part in Federal/State e-file, software should meet both IRS and state specifications.

However, before electronic return data can be transmitted (both federal and state electronic return data is transmitted to the IRS), all requirements for transmitting electronic data in IRS e-file must be met. Contact the proper state coordinator for additional requirements specific to that state.

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