New IRS e-file Rule for Providers to Obtain a Foreign EFIN Q & As


What does "business-related group" mean? 

“Business-related group” is a broad term used to include any business relationship. The Provider establishes its own policies regarding the firms in its “business-related group” for which it wants to obtain EFINs.  

Does the Provider have to obtain EFINs for all such firms in its “business-related group”?

No, each Provider may establish its own policies to determine the firms for which it will obtain an EFIN and how it monitors the use of the EFIN. Since the Provider is responsible for the other firm’s adherence to the IRS e-file rules, the Provider should only obtain EFINs for other firms it knows to be trustworthy.

Will the IRS evaluate each application on a case by case basis?

The Provider submits an IRS e-file application for each EFIN it obtains. The IRS issues EFINs to the Provider for each location from which the firm in its “business-related group” will originate the electronic submission of returns. The Provider includes its address as the mailing address, but the physical address (on the e-file application) will be the other firm’s address.

How is the Provider responsible for the other firm? 

The Provider will only be responsible for the business-related firm’s adherence to e-file rules. The Provider is not responsible for the preparation of returns of the firm in its “business-related group.”

May a United States firm challenge the authorized use of an EFIN by a foreign firm and stop the foreign firm from continued use of its EFIN?

The Provider is responsible for its EFINs and may delete the EFIN assigned to any firm location when it determines appropriate.

How will the IRS enforce the e-file rules when the e-filer is outside the US and is only “associated” with an Authorized IRS e-file Provider?

The IRS will look to the Principals and Responsible Officials for the location if necessary to assist the IRS in gathering information to address potential violations of IRS e-file rules.

What will the IRS do if the other firm is not adhering to e-file rules?

The IRS has the option to inactivate the EFIN for a “business-related” firm that is not adhering to IRS e-file rules without sanctioning the Provider or impacting its other EFINs. Most likely though the IRS will ask the Provider to relinquish the EFIN.