IRS Publication 3112 is the IRS’s rulebook for tax professionals who want to file federal returns electronically on behalf of clients. It explains who can apply to become an Authorized IRS e-file Provider, how the application and suitability screening work, what a provider must do to stay in good standing, and the sanctions that follow when the rules are broken. If you are pursuing an Electronic Filing Identification Number (EFIN) or already hold one, this is the document that defines the terms of your participation.
Who the Publication Applies To
The e-file program recognizes several provider roles, and one firm can hold more than one. The role most tax professionals occupy is Electronic Return Originator (ERO): the person who prepares a return, or collects a completed one, and submits it electronically. The Transmitter sends the return data to the IRS; many EROs act as their own transmitter. A Software Developer builds the tax software that formats returns to IRS specifications. An Intermediate Service Provider sits between the ERO and the transmitter, passing data along without preparing or transmitting it directly. A Reporting Agent originates and submits certain returns (most often employment tax returns) for clients, using Form 8655 authorization and a five-digit PIN to sign.1Internal Revenue Service. Reporting Agent Technical Fact Sheet
Applying for an EFIN
The application runs through the IRS e-Services portal. You either sign in or create an account, then complete and submit the e-file application from inside the portal.2Internal Revenue Service. Become an Authorized e-File Provider
You provide identification information for the firm and for every Principal and Responsible Official. Attorneys, CPAs, and enrolled agents enter their current professional status. Anyone who prepares federal returns for compensation must have a valid Preparer Tax Identification Number (PTIN).2Internal Revenue Service. Become an Authorized e-File Provider
Principals and Responsible Officials who are not licensed professionals must be fingerprinted through an IRS-authorized vendor. After submitting the application, you schedule the appointment through the link on the application summary page. Each person schedules separately, using a unique ID and program code embedded in that link.2Internal Revenue Service. Become an Authorized e-File Provider
The Suitability Check
Once you submit the application, the IRS runs a suitability check on the firm and every individual listed. This is where most delays and denials happen.
The tax compliance side looks at whether you have filed all required federal returns for the most recent six years and whether any account has a balance due. A single unfiled return or a small unpaid balance can trigger a failure. For credentialed preparers, failing to file two or more returns (or four or more quarterly returns) triggers a referral to the Office of Professional Responsibility.3Internal Revenue Service. IRM 25.20.3 Return Preparer Suitability
The criminal side fails anyone with a felony conviction involving a financial crime, tax crime, or other violation of public trust within five years of the application date.3Internal Revenue Service. IRM 25.20.3 Return Preparer Suitability
The IRS says the full process can take up to 45 days. If you clear it, you receive an acceptance letter with your EFIN.2Internal Revenue Service. Become an Authorized e-File Provider
Keeping Your Application Current
Approval is not the end. You must update the e-file application within 30 days of any change: individuals involved, business address, phone number, new principals, additional office locations. Failing to update can get your EFIN inactivated. The IRS also expects you to review the application periodically, even when nothing has changed, to confirm the information is still accurate. Any new Principal or Responsible Official you add goes through the same suitability screening, including fingerprinting if they are not licensed.4Internal Revenue Service. How to Maintain, Monitor and Protect Your EFIN
Protecting Client Data
Authorized providers take on real security obligations. IRS Publication 4557 sets the standards, which include multi-factor authentication for access to e-Services and to your tax preparation systems. Your EFIN must be protected from unauthorized use and cannot be shared with or loaned to another entity.
If client data is stolen, or you suspect it has been, report the theft to your local IRS Stakeholder Liaison, who notifies IRS Criminal Investigation and other internal units for you. Report the breach to the FBI, local police, and the state tax agencies where you prepare returns. Breaches affecting 500 or more individuals must also be reported to the FTC.5Internal Revenue Service. Data Theft Information for Tax Professionals
Due Diligence and Records
You must verify taxpayer identity and the accuracy of every return you file. One of the more concrete rules: do not submit a return before receiving all Forms W-2, W-2G, and 1099-R directly from the taxpayer. The only exception is when the taxpayer cannot obtain a correct form. In that case they complete Form 4852 (a substitute W-2 or 1099-R), and only then can pay stubs or leave and earnings statements support the filing.6Internal Revenue Service. IRS e-File Providers Prohibited From Transmitting Returns Prior to Receiving Forms W-2, W-2G or 1099-R
Keep copies of every electronically filed return and its supporting documents for three years from the return’s due date or the date the IRS received it, whichever is later. The records to retain include Forms W-2, W-2G, and 1099-R; signed Forms 8453 and 8879 (the e-file signature authorizations); IRS acknowledgment files for accepted returns; a complete copy of the electronic return in a format that can be converted back into a processable transmission; and any signed consent-to-disclosure forms.7Internal Revenue Service. IRS e-File Record Keeping Requirements for EROs When the retention period ends, tax data and Privacy Act information must be destroyed beyond legibility or reconstruction, not simply thrown out.8Internal Revenue Service. IRM 1.15.3 Disposing of Records
Advertising and Fees
Publication 3112 restricts how you can advertise. Disclose your fees clearly, and do not make false or misleading claims about your services or about a taxpayer’s likely refund amount. Guaranteeing a specific refund draws IRS scrutiny. So does charging fees calculated as a percentage of the taxpayer’s refund, a structure the IRS investigates because it creates an incentive to inflate return amounts.
Monitoring and Sanctions
The IRS monitors providers through compliance reviews, testing, and analysis of the volume and patterns of returns filed under each EFIN. Violations fall into three levels.
Level One violations have little or no adverse impact on the e-file system and may draw a written reprimand. Level Two violations hurt the quality of electronically filed returns, or repeat a Level One infraction after it was flagged; sanctions range from restricted participation to suspension for one or two years. Level Three violations carry a significant adverse impact and include continued Level Two infractions, identity theft, fraud, or criminal conduct; they can result in a two-year suspension or permanent expulsion from the program.9Internal Revenue Service. Publication 3112 – IRS e-File Application and Participation
For the worst infractions, the IRS can skip the normal process and immediately suspend or expel a provider without prior notice. Examples include accepting returns from entities that are not authorized e-file providers, signing a return or entering a taxpayer’s PIN without authorization, failing to cooperate with IRS monitoring, and any fraud such as altering dollar amounts on a return after showing the taxpayer a copy.10Internal Revenue Service. IRM 4.21.1 Monitoring the IRS e-File Program
Appealing a Denial or Sanction
If you are denied participation or sanctioned, you have a right to administrative review, and the deadline is short. You have 30 calendar days from the date of the proposed sanction letter to submit a detailed written explanation with supporting documentation asking that the sanction be withdrawn. Miss that window and your right to administrative review is gone.11Internal Revenue Service. IRM 8.7.13 e-File Cases
If the initial review upholds the sanction, you get one further step: an appeal to the IRS Office of Appeals, again within 30 calendar days of receiving the letter that affirms the sanction.11Internal Revenue Service. IRM 8.7.13 e-File Cases