Monitoring of IRS e-file Providers
The IRS monitors Authorized IRS e-file Providers (Providers) for compliance with the revenue procedure and IRS e-file rules and requirements.
All Providers, except those that function solely as Software Developers, must pass a suitability check on the firm as well as all Principals and Responsible Officials of the firm prior to acceptance to participate in IRS e file. To safeguard IRS e-file, the IRS completes suitability checks regularly on Providers, Principals and Responsible Officials. If the results of a suitability check indicate that a firm or individual does not meet or adhere to IRS e-file requirements, the IRS may revoke or sanction the Provider from participating in IRS e-file as explained below.
IRS e-file Monitoring
The IRS monitors Providers through review of IRS records and during visits to Providers’ offices and other locations where Providers perform IRS e-file activities. During monitoring visits, the IRS may investigate complaints and ensure compliance with IRS e-file rules. Monitoring may include, but is not limited to the following:
Reviewing the quality of IRS e-file submissions for rejects and other defects
Checking adherence to signature requirements on returns
Scrutinizing advertising material
Observing office procedures
In addition, the IRS may monitor Providers for compliance with the tax return preparer regulations, including provisions of IRC section 6695(g), which relates to the due diligence requirements for Earned Income Tax Credit claims on individual income tax returns.