IRS e-file Glossary (updated 11/06/2014)
Acceptance Letter - Correspondence that includes identification numbers that are issued by the IRS to applicants confirming they may participate in IRS e-file as Authorized IRS e-file Providers (Providers).
Acknowledgment (ACK) - A report generated by the IRS to a Transmitter that indicates receipt of all transmissions. An ACK Report identifies the returns in each transmission that are accepted or rejected for specific reasons.
Acceptance or Assurance Testing (ATS) - Required testing for Software Developer that participate in IRS e-file to assess their software and transmission capability with the IRS, prior to live processing.
Administrative Review Process - The process by which a denied applicant or sanctioned Authorized IRS e-file Provider may appeal the IRS’ denial or sanction.
Adoption Taxpayer Identification Number (ATIN) - A tax processing number issued by the IRS as a temporary taxpayer identification number for a child in the domestic adoption process who is not yet eligible for a Social Security Number (SSN). An ATIN is not a permanent identification number and is only intended for temporary use. To obtain an ATIN, complete IRS Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions.
Authorized IRS e-file Provider (Provider) - A firm accepted to participate in IRS e-file.
Automated Clearing House (ACH) - A system that administers electronic funds transfers (EFTs) among participating financial institutions. An example of such a transfer is Direct Deposit of a tax refund from IRS into a taxpayer's account at a financial institution.
Business Rules (BR) - Error codes included on an Acknowledgement (Ack) for returns that the IRS rejected. The IRS publishes explanations prior to the filing season on IRS.gov. Providers can locate these on the Schemas and Business Rules for Forms 1040/1040EZ/1040A/1040-SS (PR)/4868/2350/9465/56 Modernized e-File (MeF).
Communications Testing - Required test for all Transmitters using accepted IRS e-file software to assess their transmission capability with the IRS prior to live processing.
Denied Applicant - An applicant that the IRS does not accept to participate in IRS e-file. An applicant that the IRS denies from participation in IRS e-file has the right to an administrative review.
Depositor Account Number (DAN) - The financial institution account to which a Direct Deposit refund is to be routed.
Device ID - The Device ID is a 40-digit alphanumeric value that is case sensitive with no separators and run through hash algorithm SHA-1 that should include unique information such as the hardware serial number and UUID together.
Digital Signature - An electronic signature based upon cryptographic methods of originator authentication, computed by using a set of rules and a set of parameters such that the identity of the signer and the integrity of the data can be verified. The digital signature must be consistent with Federal Information Processing Standards for digital signatures adopted by the National Institute for Standards and Technology and includes use of the digital signature algorithm, the RSA digital signature, and the elliptic curve digital signature algorithm to verify and validate digital signatures.
Direct Deposit - An electronic transfer of a refund into a taxpayer's financial institution account.
Direct Filer - see "Transmitter".
Drop or Dropped - An EFIN that is no longer valid due to inactivity or other administrative action.
Due Diligence - Due Diligence, when used in context with the Earned Income Tax Credit (EITC), refers to requirements that income tax return preparers must follow when preparing returns or refund claims that involve EITC.
Earned Income Tax Credit (EITC) - The Earned Income Tax Credit is a refundable individual income tax credit for certain persons who work.
EITC Recertification - A requirement for a taxpayer previously denied EITC to provide additional information on Form 8862, Information to Claim Earned Income Tax Credit After Disallowance, when they file a similar EITC claim on a subsequent return.
Electronic Federal Tax Payment System (EFTPS) – A free service from the U.S. Treasury through which federal taxes may be paid. The taxpayer can pay taxes via the Internet, by phone or through a service provider. After authorization, EFTPS electronically transfers payments from the authorized bank account to the Treasury’s general account.
Electronic Filing Identification Number (EFIN) - An identification number assigned by the IRS to accepted applicants for participation in IRS e-file.
Electronic Funds Transfer (EFT) - The process through which Department of the Treasury transmits Direct Deposit refunds from the government to the taxpayer's account at a financial institution.
Electronic Funds Withdrawal (EFW) - A payment method that allows the taxpayer to authorize the U.S. Treasury to electronically withdraw funds from their checking or savings account.
Electronic Management System (EMS) - front-end processing system for electronic information exchange between the Internal Revenue Service (IRS) and Authorized IRS e-file Providers (Providers), to a designated Submission Processing Campus. EMS receives returns from Transmitters, acknowledges the receipt of the information and prepares the information for mainframe processing.
Electronic Postmark - The Electronic Postmark is the date and time the Transmitter first receives the electronic return on its host computer in the Transmitter's time zone. The taxpayer adjusts the time to their time zone to determine timeliness.
Electronic Record - Any combination of text, graphics, data, audio, pictorial or other information representation in digital form that is created, modified, maintained, archived, retrieved or distributed by a computer system.
Electronic Return Originator (ERO) - An Authorized IRS e-file Provider that originates the electronic submission of returns to the IRS.
Electronic Signature - A method of signing an electronic message that identifies and authenticates a particular person as the source of the electronic message and indicates such person’s approval of the information contained in the electronic message.
Electronic Signature Pad - An electronic device with a touch sensitive LCD screen which allows users to acquire and register a signature or any other physical signature capture device that captures and converts a signature into an electronic format.
Electronic Tax Administration and Refundable Credits (ETARC) – ETARC is the office within IRS with management oversight of the IRS’ electronic commerce initiatives. The mission of ETARC is to revolutionize how taxpayers transact and communicate with the IRS.
Electronic Tax Administration Advisory Committee (ETAAC) - An advisory group established by the IRS Restructuring and Reform Act of 1998 to provide an organized public forum for discussion of ETARC issues in support of the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns.
Electronic Transmitter Identification Number (ETIN) - An identification number assigned by the IRS to a participant in IRS e-file that performs activity of transmission and/or software development.
Element Name (Tag Name) - a defined field name which the Software must use to identify the data they are providing.
Federal/State e-file - The Federal/State e-file option allows taxpayers to file federal and state income tax returns electronically in a single transmission to the IRS.
Financial Institution - For the purpose of Direct Deposit of tax refunds, the IRS defines a financial institution as a state or national bank, savings and loan association, mutual savings bank or credit union. Only certain financial institutions and certain kinds of accounts are eligible to receive Direct Deposits of tax refunds.
Financial Management Service (FMS) - The agency of the Department of the Treasury through which payments to and from the government, such as Direct Deposits of refunds, are processed.
Fraudulent Return - A "fraudulent return" is a return in which the individual is attempting to file using someone’s name or SSN on the return or where the taxpayer is presenting documents or information that have no basis in fact.
Note: Taxpayers should not file fraudulent returns with the IRS.
Indirect Filer - An Authorized IRS e-file Provider who submits returns to IRS via the services of a Transmitter.
Individual Taxpayer Identification Number (ITIN) - A tax processing number that became available on July 1, 1996, for certain nonresident and resident aliens, their spouses and dependents. The ITIN is only available from IRS for those individuals who cannot obtain a Social Security Number (SSN). To obtain an ITIN, complete IRS Form W-7, Application for IRS Individual Identification Number.
Intermediate Service Provider - An Authorized IRS e-file Provider that receives electronic tax return information from an ERO or a taxpayer who files electronically using a personal computer and commercial tax preparation software, that processes the electronic tax return information and either forwards the information to a Transmitter or sends the information back to the ERO or taxpayer.
Internet Protocol (IP) Information - The IP address, date, time and time zone of the origination of a tax return filed through Online Filing via the Internet. IRS requires Transmitters that provide Online Services via the Internet to capture the Internet Protocol Information of Online returns. By capturing this information, it transmits the location of the return’s originator with the individual’s electronic return. See Publication 4164 for additional Information.
IRS e-file - The brand name of the electronic filing method established by the IRS.
IRS e-file Marketing Tool Kit - A specially designed kit containing professionally developed material that EROs may customize for use in advertising campaigns and promotional efforts.
IRS Master File - A centralized IRS database containing taxpayers' personal return information.
Levels of Infractions (LOI) - Categories of infractions of IRS e-file rules based on the seriousness of the infraction with specified sanctions associated with each level. Level One is the least serious, Level Two is moderately serious and Level Three is the most serious.
Memorandum of Agreement (MOA) & Memorandum of Understanding (MOU) - The implementing document containing the set of rules established by the IRS for participating in IRS pilots/programs.
Modernized e-File (MeF) - The Modernized e-File (MeF) system is an Internet-based electronic filing platform. It is a transaction-based system that allows tax return originators to transmit returns electronically to the IRS in real-time. MeF improves the response time required to issue an acknowledgement file to the transmitter that indicates whether the return was accepted or rejected for downstream processing.
Monitoring - Activities the IRS performs in order to ensure that Authorized IRS e-file Providers are in compliance with the IRS e-file requirements. Monitoring may include, but is not limited to, reviewing IRS e-file submissions, investigating complaints, scrutinizing advertising material, checking signature form submissions and/or recordkeeping, examining records, observing office procedures and conducting periodic suitability checks. IRS personnel perform these activities at IRS offices and at the offices of Providers.
Name Control - The first four significant letters of a taxpayer's last name that the IRS uses in connection with the taxpayer SSN to identify the taxpayer, spouse and dependents.
Non-substantive Change - A correction or change limited to a transposition error, misplaced entry, spelling error or arithmetic correction which does not require new signatures or authorizations to be transmitted or retransmitted.
Originate or Origination - Origination of an electronic tax return submission occurs when an ERO either:
- directly transmits electronic returns to the IRS,
- sends electronic returns to a Transmitter or
- provides tax return data to an Intermediate Service Provider.
Pilot Programs - An approach that the IRS uses to improve and simplify IRS e-file. The IRS usually conducts pilot programs within a limited geographic area or within a limited taxpayer or practitioner community. The IRS embodies rules for participating in pilot programs in an implementing document typically referred to as a "Memorandum of Understanding" (MOU) or "Memorandum of Agreement" (MOA). Pilot participants must agree to the provisions of the implementing document in order to participate in the pilot program.
Potentially Abusive Return - A "potentially abusive return" is a return
- that is not a fraudulent return;
- that the taxpayer is required to file; or
- that may contain inaccurate information that may lead to an understatement of a liability or an overstatement of a credit resulting in production of a refund to which the taxpayer may not be entitled.
Note: The decision not to provide a RAL or other bank product does not necessarily make it an abusive return.
Practitioner PIN Method - An electronic signature option for taxpayers who use an ERO to e-file. This method requires the taxpayer to create a five-digit Personal Identification Number (PIN) to use as the signature on the e-filed return.
Note: Requires Form 8879 to be completed.
Preparer's Tax Identification Number (PTIN) - An identification number issued by the IRS that paid tax return preparers must use on returns they prepared. A PTIN meets the requirements under section 6109(a)(4) of furnishing a paid tax return preparer's identifying number on returns that he or she prepares. Obtain a PTIN on IRS.gov.
Refund Anticipation Check (RAC) – Financial product where the tax refund is issued to a limited/special‑purpose deposit account at a financial institution that disburses fees associated with tax preparation and/or other services, and the balance to the taxpayer.
Refund Anticipation Loan (RAL) - A Refund Anticipation Loan is money borrowed by a taxpayer that lender bases on a taxpayer's anticipated income tax refund. The IRS has no involvement in RALs. A RAL is a contract between the taxpayer and the lender. A lender may market a RAL under various commercial or financial product names.
Refund Cycle - The anticipated date that the IRS would issue a refund either by Direct Deposit or by mail to a taxpayer. However, neither the IRS nor FMS guarantees the specific date that Department of the Treasury mails a refund or deposits it into a taxpayer's financial institution account.
Request for Agreement (RFA) - A solicitation, normally a written document, used in establishing non-monetary memoranda of agreement. RFAs are not "acquisitions" as defined by the Federal Acquisition Regulations (FAR).
Request for Procurement (RFP) - A solicitation, normally a written document, used in negotiated acquisitions estimated over $100,000 (as opposed to sealed bids) to communicate government requirements to prospective contractors and to solicit proposals to perform contracts.
Responsible Official - An individual with authority over the IRS e-file operation of the office(s) of an Authorized IRS e-file Provider, who is the first point of contact with the IRS and has authority to sign revised IRS e-file applications. A Responsible Official is responsible for ensuring that the Authorized IRS e-file Provider adheres to the provisions of the Revenue Procedure and the publications and notices governing IRS e-file.
Revenue Protection - A series of compliance programs designed to ensure that the revenue the government collects and/or disburses in the form of refunds is accurate and timely, and that it issues disbursement of revenue only to entitled taxpayers.
Routing Transit Number (RTN) - A number assigned by the Federal Reserve to each financial institution.
RSA - An algorithm developed by Rivest, Shamir and Adleman.
Sanction – An action taken by the IRS to reprimand, suspend or expel from participation in IRS e-file, an Authorized IRS e-file Provider based on the level of infraction. See also Level of Infraction.
Self-Select PIN Method - An electronic signature option for taxpayers who e-file using either a personal computer or an ERO. This method requires the taxpayer to create a five-digit Personal Identification Number (PIN) to use as the signature on the e-file return and to submit authentication information to the IRS with the e-file return.
Software Developer - An Authorized IRS e-file Provider that develops software for the purposes of (a) formatting the electronic portions of returns according to Publication 4164 and/or (b) transmitting the electronic portion of returns directly to the IRS. A Software Developer may also sell its software.
Stockpiling – Stockpiling is waiting more than three calendar days to submit returns to the IRS after the Provider has all necessary information for origination of the electronic return or collecting e-file returns prior to official acceptance for participation in IRS e-file. The IRS does not consider collecting tax returns for IRS e-file prior to the startup of IRS e-file as stockpiling. However, Providers must advise taxpayers that it cannot transmit the returns to the IRS prior to the startup date.
Stylus Device - A device used on a display screen to input commands or handwritten text.
Submission ID - A globally unique 20 digit number assigned to electronically filed tax returns with the following format: (EFIN + ccyyddd + 7-digit alphanumeric sequence number).
Suitability - A check conducted on all firms and the Principals and Responsible Officials of firms when an application is initially processed, and on a regular basis thereafter. The suitability check includes a background check conducted by the IRS to ensure the firm and individuals are eligible for participation in IRS e-file.
Suspension - A sanction revoking an Authorized IRS e-file Provider's privilege to participate in IRS e-file.
Transmitter - An Authorized IRS e-file Provider that transmits the electronic portion of a return directly to the IRS. An entity that provides a "bump-up" service is also a Transmitter. A bump-up service provider increases the transmission rate or line speed of formatted or reformatted information that it is sending to the IRS via a public switched telephone network.
Treasury Offset Program (TOP) - Public Law that established the Tax Refund Offset Program which permits the government to offset overpayments against delinquent child support obligations as well as debts owed to participating federal and state agencies. Treasury’s Financial Management Service (FMS) office assumes responsibility and oversight for TOP.
Warning - Written notice given by the IRS to an Authorized IRS e-file Provider requesting specific corrective action be taken to avoid future sanctioning.
Written Reprimand - A sanction for a level one infraction of the IRS e-file rules. It reprimands a Provider for an infraction but does not restrict or revoke participation in IRS e-file.