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3.42.4  IRS for Business Tax Returns (Cont. 1)

3.42.4.5 
IRS Application Process Overview

3.42.4.5.3 
Business Participant Criteria

3.42.4.5.3.3  (09-14-2016)
Certification Program for Professional Employer Organizations (CPEOs)

  1. Beginning 2017, approved CPEOs under IRC Section 7705 who are authorized to deposit, report and pay federal employment taxes must file Schedule R (Form 941) and all other required schedules with Form 941 electronically, unless granted a waiver by the Commissioner. A professional employer organization (PEO), sometimes referred to as an employee leasing company, is an entity that enters into an agreement with a client to perform some or all of the federal employment tax withholding, reporting, and payment functions related to workers performing services for the client.

  2. Generally, to become a CPEO under IRC Section 7705, a CPEO applicant must first complete and submit an online application through the CPEO Application. Once certified, a CPEO will be required to file Form 8973, Certified Professional Employer Organization / Customer Reporting Agreement, to notify the IRS when a service contract has started or ended with a customer. The January 2017 revision of the Schedule R (Form 941) will first be used with the 1st quarter 2017 Form 941, which will first be filed in April 2017.

  3. CPEOs may submit returns directly to the IRS by applying to become an Authorized e-file Provider. The CPEO can also contract with a Reporting Agent or subagent, or can choose to submit the returns through an Authorized e-file Provider, known as a Transmitter. Review the information referenced in this section for additional guidelines.

3.42.4.5.3.4  (10-01-2016)
Special Conditions for 94x On-Line Filer

  1. A 94x On-Line Filer is a taxpayer that electronically files Form 94x returns through a transmitter using a personal computer and commercial tax preparation software.

  2. The 94x On-Line Filer must submit the appropriate 94x PIN Registration form 45 days in advance of the due date of the Form 94x return to ensure timely filing.

  3. Returning the signed statement of receipt (SOR) indicates possession of and responsibility for the proper use of the 94x On-Line Signature PIN. IRS will issue the PIN to the Authorized Signer, via U.S. Mail, within 45 days of the Service's receipt of their completed Letter of Application (LOA).

  4. The 94x PIN Registration Process will apply to 94x MeF online filers. They can sign their return using the 94x On-Line Filer PIN, or sign , Form 8453-EMP and attach it as a PDF file to the return.

3.42.4.5.3.5  (10-01-2016)
Special Criteria for EROs

  1. Advise Electronic Return Originators (EROs) of the following:

    • You are only authorized to originate income tax returns and other business tax returns for your clients.

    • You do not sign the returns on behalf of your clients.

    • For an ERO to become a Transmitter, authorized to prepare and transmit Business e-file returns, utilizing MeF Programs, he/she must apply online through e-services. If the ERO already has an application on file, then advise of the need to update the Provider role to include Transmitter on their application through e-services or the e-help Desk.

    • EROs will be able to sign with a Practitioner PIN utilizing the Form 8879-EMP

3.42.4.5.4  (10-01-2016)
Identification Numbers for Business e-file Programs

  1. To participate in Business e-file Programs, IRS issues the following unique identification numbers to each participant based on the programs used and the participant role identified:

    Unique Identification Numbers Participant Role
    Electronic Filer Identification Number
    (EFIN)
    All participants, including Electronic Return Originators (EROs)
    Electronic Transmitter Identification Number
    (ETIN)
    Transmitters and Software Developers
    Reporting Agent Personal Identification Number
    (5 Digit PIN)
    Reporting Agents
    94x On-Line Filer PIN
    (10 Digit PIN)
    Form 94x Business Taxpayers
    Practitioner PIN
    (5 Digit PIN)
    Participant role: ERO

    Note:

    The 94x On-Line Filer PIN is used for 94x MeF filers for all tax years and quarters. The 94x MeF filer can also sign using Form 8453-EMP sent as a binary attachment. The Form 8879-EMP can be used in lieu of a Form 8453-EMP by an authorized e-file Provider/ERO who is preparing the return for an individual business.

3.42.4.5.4.1  (10-01-2016)
Electronic Transmitter Identification Number (ETIN)

  1. The Electronic Transmitter Identification Number (ETIN) is a unique identification number assigned utilizing the IRS e-fileApplication. The ETIN is a 5 digit identification number determined by the e-help Desk. Each Authorized IRS e-file Provider - Transmitter and Software Developer, who will transmit returns to the IRS directly or who develops software, is assigned an ETIN. The ETIN is issued during the testing or production stage, as applicable.

  2. Transmitters are issued a production ETIN and after successful test transmission, the Form type is moved to production. The transmitter may also request a Test ETIN, which can be used to continue testing once the original ETIN has been moved to Production status.

    Note:

    Reporting Agents that transmit returns directly to the IRS must follow the instructions provided for Transmitters throughout this IRM and other applicable documents. A Reporting Agent will only receive an ETIN if he/she transmits returns directly to the IRS without the assistance of an intermediate. The Reporting Agent must indicate on his/her application that he/she will transmit returns directly by checking that he/she is a Transmitter. A Reporting Agent must have an EFIN in addition to the RA PIN to submit returns electronically.

  3. Software Developers are issued a test ETIN and this ETIN is never moved to production status. If the Software Developer will serve as a transmitter, a production ETIN should also be issued. After successfully completing the test process it should be moved to production status.

3.42.4.5.4.2  (10-01-2016)
Personal Identification Number (PIN)

  1. The e-help Desk will complete all 94x On-Line PIN Registration processing steps for the Business Taxpayer filing through MeF. The e-help Desk will use the EUP MeF 94x PIN application to complete the 94x PIN Registration Process.

  2. Below are the different signature PINs that can be used with the different MeF programs.

  3. 94x MeF Program participants can use Form 8879-EMP, IRS e-file Signature Authorization for Forms 940, 940-PR, 941, 941-PR, 941-SS, 943, 943 -PR, 944, and 945, to create a self select PIN to electronically sign the return. Both the ERO and the client must sign the Form 8879-EMP. The ERO must retain the original document on file and submit a copy to the IRS, only if requested. The 94x MeF filer also has the option of using Form 8453-EMP, Employment Tax Declaration for an IRS e-file Return, as a binary attachment to their electronic return. Other PIN signature options for the 94x MeF Program are:

    • 94x On-Line Signature PIN - a unique identification number to be used by the 94x On-Line Filer who files their own return electronically via an on-line filing option. The MeF 94x PIN application will generate a 10-digit PIN to the 94x On-Line Filer. The PIN is for the individual authorized to sign their 94x returns.

    • Reporting Agent PIN - a 5-digit PIN issued through TPDS. Reporting Agents use their PIN to sign 94x Returns for their clients with a Form 8655on record with IRS.

  4. Form 1041 MeF Program participants can sign using the self selected PIN by completing the Form 8879-F, IRS e-file Signature Authorization for Form 1041. The form is used by the ERO and a general partner or limited liability company member when they want to use a PIN to electronically sign the return. They also have an option of using the Form 8453-FE, U.S. Estate and Trust Declaration for an IRS e-file Return, as a binary attachment to their MeF electronically filed return.

  5. Form 1065 and Form 1065-B Program participants can use Form 8879-PE, IRS e-file Signature Authorization for Form 1065, or Form 8879-B, IRS e-file Signature Authorization for Form 1065-B, to create a self select PIN to electronically sign a partnership's electronic income tax return, or they can authorize their ERO to sign using the Practitioner PIN method. Both the ERO and the client must sign the Form 8879. The ERO must retain the original document on file and submit a copy to the IRS, only if requested. They also have the option of using the Form 8453-PE, U.S. Partnership Declaration for an IRS e-file Return, or Form 8453-B, U.S. Electing Large Partnership Declaration for an IRS e-file Return, as a binary attachment to their electronic return.

  6. Form 1120 and Form 990 Programs, participants can use a PIN to sign returns. As an option, the participant creates a self-selected PIN by completing the applicable form online:

    • Form 8879-I, IRS e-file Signature Authorization for Form 1120-F

    • Form 8879-S, IRS e-file Signature Authorization for Form 1120S

    • Form 8879-EO, IRS e-file Signature Authorization for an Exempt Organization

    • Form 8879-C, IRS e-file Signature Authorization for Form 1120

    Both the ERO and the client must sign the Form 8879. The ERO must retain the original document on file, and is not required to submit a copy to the IRS unless requested. The Form 1120 and Form 990 participant can select this method in lieu of using the Form 8453-I, Foreign Corporation Income Tax Declaration for an IRS e-file Return, Form 8453-S, U.S. S Corporation Income Tax Declaration for an IRS e-file Return, Form 8453-EO, Exempt Organization Declaration and Signature for Electronic Filing, Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status, or Form 8453-C, U.S. Corporation Income Tax Declaration for an IRS e-file Return.

    Exception:

    No signature document required with Form 990-N.

  7. ETEC MeF Program (Form 720, Form 2290 and Form 8849) participants can sign using the self selected PIN by completing the Form 8879-EX, IRS e-file Signature Authorization for Forms 720, 2290, and 8849. Both the ERO and the client must sign the Form 8879-EX. The ERO must retain the original document on file, and is not required to submit a copy to the IRS unless requested.

  8. Form 2290 participants can use Form 8453-EX, Excise Tax Declaration for an IRS e-file Return, to sign the forms. Additional signature options apply for Form 2290 filers, after the Form 2290 is signed:

    • The taxpayer can sign a consent to share VIN (Vehicle Identification Number) information with the Department of Transportation and participating states, if IRS requirements are met.

    • The Taxpayer can sign the Disclosure Consent on the Form 2290 and enter their PIN, if the Taxpayer is preparing a web-based return. The Consent page with the language is attached to the return in a PDF format.

    • The Taxpayer can enter the PIN and sign the Form 8453-EX, then have the ERO scan Form 8453-EX. The Consent page with the language is attached to the return in a PDF format.

  9. Advise e-file participants that Form 8878-A, IRS e-file Electronic Funds Withdrawal Authorization for Form 7004, is used by persons authorized to sign an electronic funds withdrawal authorization and an Electronic Return Originator (ERO) to use a PIN to authorize an electronic funds withdrawal of the balance due on an electronic Form 7004.

3.42.4.5.4.3  (10-01-2014)
Electronic Filing Identification Number (EFIN)

  1. An Electronic Filing Identification Number (EFIN) is issued to all e-file participants via the IRS e-file Application. The EFIN allows the IRS to identify the Authorized IRS e-file Provider. The EFIN is a 6 digit identification number.

  2. The following Provider Options are assigned an EFIN:

    • Electronic Return Originator (ERO)

    • Intermediate Service Provider (ISP)

    • Large Taxpayer

    • Online Provider

    • Reporting Agent

    • Software Developer (SWD)

    • Transmitter

    • Affordable Care Act (ACA) Provider

3.42.4.5.5  (10-01-2016)
Applicable Business e-file Enrollment/Application Methods

  1. It is required that all new or revised applications be completed using the electronic IRS e-file Application.

  2. Applicants must first register for e-services before initiating an IRS e-file Application. Go online to Become an Authorized IRS e-file Provider in 3 Steps for more information on becoming an Authorized IRS e-file Provider.

  3. The IRS e-file Application uses a consolidated application process that allows users to apply for both Business and Individual e-file Programs by completing one application. Applicants can apply for participation in the MeF System, dependent upon the forms they would file.

  4. Applicants can submit an application using e-Services IRS e-file Application via the Integrated Enterprise Portal (IEP).

  5. Advise applicants that all applications must contain the following:

    • The name, address, and Employer Identification Number (EIN) of the Applicant (Social Security Number (SSN) can be used for a sole proprietor

    • The name, title, and telephone number of the person to contact regarding the Application

    • The first tax period for which the Applicant plans to file e-file returns or have software available to the public

    • A listing of any suspension from any of the Service's electronic filing programs, and

    • A statement that the Applicant will comply with the responsibilities of an Electronic Filer, as detailed in the applicable Revenue Procedures and/or Publications that provide the program guidelines. For more information, see IRM 3.42.4.5.6.

  6. Also advise applicants to review the Revenue Procedure 2007-40, Authorized IRS e-file Provider Responsibilities, for more information.

3.42.4.5.6  (10-01-2013)
IRS e-file Application Processing

  1. Tax Examiners and System Administrators should log onto the Third Party Data Store (TPDS) via the EUP to access the IRS e-file Application on the Employee User Portal (EUP) to complete the application process. Use the IRS e-file Application to input applicant information and to complete the application approval process. Applications are processed on an issue based system. The system generates a worklist to employees to identify the activity name that caused the application to appear on the worklist. The worklist also shows the applicant, date assigned and the length of time on the worklist. An Application is considered complete once all related worklist items are completed. Review the following references for additional guidelines:

    • IRM 3.42.10, Authorized e-file Providers

    • Publication 3112, IRS e-file Application and Participation

    All participants receive an EFIN, including EROs, Transmitters, and Software Developers. The IRS e-file Application also generates the PIN to Reporting Agents once their application is updated.

  2. The IRSe-fileApplication will issue an ETIN for Transmitters and Software Developers. Reporting Agents that transmit returns directly to the IRS will also receive an ETIN if the category for Transmitter is checked on the new or revised application.

  3. The IRS e-fileApplication can generate different status letters upon request.

  4. Review IRM 3.42.10, Authorized e-file Providers, for instructions on completing the enrollment process.

3.42.4.6  (10-01-2016)
e-file Revenue Procedures and Program Publications

  1. Review the following Revenue Procedures and publications for complete guidelines regarding the Business e-file Programs:

    e-file Revenue Procedures and Program Publications
    Document Name Subject
    Revenue Procedure 2007-40 Authorized IRS e-file Provider Responsibilities
    Revenue Procedure 2012-32 Requirements for completing and submitting Form 8655 Reporting Agent Authorization
    Revenue Procedure 2013–39 Designation of Agent by Application
    Revenue Procedure 2016-33 Applying for certification as a Certified Professional Employer Organization (CPEO).
    Publication 3112 IRS e-file Application and Participation
    Publication 1474 Technical Specifications Guide For Reporting Agent Authorization and Federal Tax Depositors
    Publication 4163 Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns
    Publication 4164 Modernized e-File (MeF) Guide for Software Developers and Transmitters
    Publication 5078 Modernized e-File (MeF) Test Package (Business Submissions)

3.42.4.7  (10-01-2016)
Signature Documents for IRS e-file Programs

  1. This section describes the different signature methods and requirements used in the IRS e-file Programs.

  2. In May 2003, the Tax Administration Council (TAC) approved the expanded use of faxes for receiving information and documents from taxpayers and practitioners in circumstances where contact with the taxpayer has been made and documented, and faxed signatures are legally sufficient. On September 23, 2011, a revision to the IRS’s fax policy was announced by the Deputy Commissioner for Services and Enforcement relating the consents to assess additional tax and closing agreements.

  3. On November 19, 2015, a further revision to the IRS’s use of fax policy was announced. It is available here http:irweb.irs.gov/AboutIRS/co/dcse/memo/48254.aspx.

3.42.4.7.1  (04-29-2014)
Signature Documents for MeF Programs

  1. This section provides the guidelines and processing steps for handling signature documents for MeF Programs. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ In January 2014, a Form 8453-EMP pilot began. The pilot resulted from a request by Compliance Field Function to review ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ electronic Form 8453-EMP to support the Trust Fund Recovery Program (TFRP) using the modernized platform. Users should review the following publication for more information about program requirements for MeF Programs:

    • Publication 4163, Modernized e-File Information for Authorized IRS e-file Providers for Business Returns

  2. MeF allows the following signature options:

    • If the taxpayer uses an ERO, they can use the Practitioner PIN method or the scanned Form 8453

    • If the taxpayer is a Large Taxpayer, filing their own return, they are required to use the scanned Form 8453 method (they cannot use the Practitioner PIN method).

    • If the taxpayer uses a Reporting Agent, the Reporting Agent will sign the return using the 5 digit Reporting Agent PIN.

  3. For business taxpayers and the Electronic Return Originator (ERO) to sign electronic returns filed via the MeF Programs, the taxpayer must decide whether they want to enter their own Personal Identification Number (PIN) to sign the return or whether they authorize the ERO to enter the PIN chosen by the ERO.

3.42.4.7.1.1  (10-01-2013)
Form 8453 Option for MeF Programs

  1. A Form 8453, declaration and signature document, is attached to the MeF return as a binary attachment. The appropriate forms must be scanned and attached to the return by a participant when a PIN signature is not used. The form must be attached to the return in a PDF format. A paper copy of the scanned Form 8453 should not be mailed to the IRS. The business taxpayer using the Form 8453 Option must select the applicable Form 8453, as follows:

    • Form 8453-PE, U.S. Partnership Declaration for an IRS e-file Return, for Form 1065 MeF and Form 1065 MeF On-Line Programs

    • Forms 8453-B, U.S. Electing Large Partnership Declaration for an IRS e-file Return, for Form 1065-B MeF and Form 1065-B On-Line Programs

    • Form 8453-C, U.S. Corporation Income Tax Declaration for an IRS e-file Return, for Form 1120 MeF and Form 1120 MeF On-Line Programs

    • Form 8453-I, Foreign Corporation Income Tax Declaration for an IRS e-file Return, for Form 1120-F MeF and Form 1120-F On-Line Programs

    • Form 8453-S, U.S. S Corporation Income Tax Declaration for an IRS e-file Return, for Form 1120S MeF and Form 1120S On-Line Programs

    • Form 8453-EO, Exempt Organization Declaration and Signature for Electronic Filing, for Exempt Organization Programs

    • Form 8453-EX, Excise Tax Declaration for an IRS e-file Return, for Excise Tax Programs Form 720, Form 2290 and Form 8849

      Note:

      There is an exception for the Form 2290. If a taxpayer does not use an ERO and if the transmitter can authenticate the taxpayer through their credit card payment authorization, the taxpayer may use a PIN to sign the Form 2290 electronically, print out the Form 8453-EX and hold on to it.

      Note:

      The Form 8849 and Form 720 must have the Form 8453-EX as a PDF with the transmission or, if they used an ERO, they can follow the existing Form 8879 process.

    • Form 8453-EMP, Employment Tax Declaration for an IRS e-file Return, for Form 940, Form 940-PR, Form 941, Form 941-PR, Form 941-SS, Form 943, Form 943-PR, Form 944, and Form 945

    • Form 8453-FE, U.S. Estate or Trust Declaration for an IRS e-file Return, for Form 1041

  2. Binary attachments (Form 8453 Signature document) are checked from a listing of accepted DLN’s ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , to verify a valid Form 8453 is present. The correct entity information (must match the return entity information) and a signature must be present on the applicable signature line to be considered acceptable.

  3. For additional guidelines refer to Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters.

3.42.4.7.1.2  (01-01-2009)
MeF System Signature Reporting Requirements Processing

  1. Create and update the Binary Summary sheet weekly. The spreadsheet should show the following:

    • Beginning and ending dates of the week (i.e., 2005/02/11 – 2005/02/18)

    • Number of DLNs reviewed and number of errors found for each Form researched (i.e., Form 1120 463 received, 5 errors)

    • Number of phone contacts

    • Number of letters sent

    • Number complied in response to phone/letter contact

    • Number complied via fax and mail in

    • Number of "290 for zero" actions completed

  2. Keep the information current and detailed. It must include information for each binary attachment that was/is not acceptable. Keep a detailed Audit Trail of dates and actions.

3.42.4.7.1.3  (10-01-2013)
MeF Signature Documents Listings

  1. Access and print the Listings as follows:

    1. Access InfoView

    2. Click on Document List

    3. Click on Public Folders

    4. Click on MeF Folder

  2. Type in the first 8 characters, including hyphens, of the desired report name in the SEARCH box, as follows:

    • BMF-M018 (Form 8453 PDF Returns: Form 1065, Form 1065-B, Form 1120, Form 1120S, Form 1120-F, Form 1041, Form 940, Form 940-PR, Form 941, Form 941-PR , Form 941-SS, Form 943, Form 943-PR, Form 944, Form 945)

    • EO-M016 (Form 8453 PDF Balance Due: Form 990-PF, Form 1120-POL)

    • EO-M017 (Form 8453 PDF Gross Receipts: Form 990, Form 990EZ)

    • EXC-M010 (Form 8453 PDF Returns: Form 720, Form 2290, Form 8849

    Note:

    All 8 characters may not be necessary to access the reports. For instance, you can access your report by typing m018 (Business Objects is not case sensitive).

  3. Click on SEARCH (Another Dynamic screen displays).

  4. Click on the applicable report, options listed above in Paragraph 2.

    Note:

    There will be three reports with the same heading. Open the first report (Not the daily or year to date (ytd)).

    Note:

    Only access the BMF reports, not the ATS reports.

  5. Click on the Refresh All Button (located in the upper right portion of the screen) to access the desired date ranges in YYYY/MM/DD format. Put in the date range you wish to run the query on, normally the Saturday through Friday of the previous week will be used.

  6. Click on Run (The report displays in HTML format.). To view specific Form Types within the Business Object:

    • Open the "Tax Type (All values)" drop-down

      Note:

      Do not change "Business Type (All values)."

    • Click on the desired Tax Type option (The applicable Form displays.)

      Note:

      If no options are available in the drop-down it means that various Form Types did not come in during the accessed date range. The various Form Types in BMF-M018 (Form 1065, Form 1120, Form 1120S, Form 1041, Form 940, Form 940-PR, Form 941, Form 941-PR, Form 941-SS, Form 943, Form 944, Form 945) must be printed separately. No separate printing of Form Types is done for either the EO-M016 or the EO-M017 Business Objects (these are printed as All Values).

3.42.4.7.1.4  (04-29-2014)
Report Printing Instructions

  1. To print the report showing the DLNs needing to be reviewed take the following steps:

    1. With the document open and sorted to the correct form type, click on Document (Tab in upper left hand side of document) > Save to my computer as > Excel

    2. The File Download dialog box will appear. Select open. This will open the report in an excel file that can be sorted.

    3. With the excel file open, highlight the DLN Header row and click on Data > Filter > AutoFilter

      Note:

      Do not filter for refunds on 94x returns. 25 percent of all electronic Forms 8453-EMP are being reviewed.

    4. To filter the file for refund returns, click on the AutoFilter drop down arrow to the right of the column header Refund and select (Custom…)

    5. This will open a Custom AutoFilter box. In the top box on the left click on the drop down arrow and select is greater than and in the top box on the right enter 0

    6. Click OK, this will filter the report and only show refund returns.

    7. Print and close the report.

  2. Access the next report to print, as follows:

    • Click on Document > Close

    • Access in the Search box as previously directed above, see IRM 3.42.4.7.1.3

      Note:

      Refer to IRM 3.42.4.7.1 (1) for the guidelines on reviewing the Forms 8453.

3.42.4.7.1.5  (10-01-2014)
MeF System Signature Documents - Working the Listings

  1. Complete the steps to work the listings, as follows:

    • Access EUP

    • Open MeF Help Desk PRD

    • Click on the DLN tab 4

    • Type in the DLN from the listing

      Note:

      The return’s data, for the DLN just entered, will display.

  2. Research for Signature verification by clicking on 8453 Signature Document in the tree.

  3. If no 8453 Signature Document is in the tree, verify the DLN. If DLN is correct, complete the following:

    1. Check in the Additional Summary, if Signature Option shows that a PIN was entered, no Form 8453 is required. Direct the ERO to maintain the paper Form 8879/Form 8453 in their file for 3 years from the IRS due date or received date, whichever is later.

    2. Scroll down to the bottom of the options on the tree - Click on the Index option - the Return Index window displays. It lists the transmission by index.

    3. Scroll down and click on the dark blue Document Type title. This places the index in ascending alphabetical order.

    4. Scroll down and click on Binary Attachment. The Binary Attachment displays. Continue at this point using the applicable Research Codes If no Form 8453 displays, contact correct MeF Analyst.

  4. If 8453 Signature Document is located in the tree, complete the following:

    1. Scroll down and click on the 8453 Signature Document. The binary attachment displayed should be a Form 8453.

    2. Verify there is a signature on the Form 8453 by clicking on the Filer EIN (located in the tree)

    3. Visually verify that the Filer Name on the return matches the Name shown on the Form 8453.

  5. The transmitter is responsible for the correct signing on the Form 8453. A signature must be present to be an IRS acceptable Form 8453.

    Note:

    A digitally signed return is not accepted

    .

  6. A title is not required on Form 8453.

  7. Verify only that the signature is present by scrolling down through the Form 8453 to the signature area.

  8. Illegible handwriting is considered a valid signature except when a poorly scanned document causes the signature to be altered (i.e., stretched out).

  9. The Signature must be for the correct Tax Year.

    Note:

    Since most of the Forms 8453 come from taxpayers who are filing through On-Line Providers, there will only be a taxpayer’s signature on the document.

  10. If the taxpayer signed on the wrong line, complete the following:

    • Print the Form 8453 - Edit "signed on wrong line" on the listing

    • Red arrow (on the 8453) the signature to the correct signature line

    • Enter "290 for zero" action to send the printed 8453 to Files

  11. If the signature indicates signed via POA, you must research to verify that the POA is on file and current.

  12. If "Applied For" is edited in the EIN box on the Form 8453, complete the following, if the MeF return shows an EIN, the same Business Name, and the Form 8453 is signed:

    • Print the Form 8453 from the MeF screen

    • Re- edit the EIN onto the Form 8453

    • Notate action on the listing

    • Enter "290 for zero" action to send the printed 8453 to Files

3.42.4.7.1.6  (10-01-2016)
Handling Incomplete Forms 8453 for MeF Programs

  1. There are several actions required to handle the receipt of incomplete Forms 8453 for MeF Programs. This section will give specific instructions for each of the referenced forms listed above, see IRM 3.42.4.7.1.1.

  2. Tax Examiners will do the following:

    1. Route all incomplete Form 8453 to the clerk to establish a suspense file.

    2. Remove Form 8453 from the suspense file every Monday morning for additional calls or letters.

    3. When response to correspondence via fax, e-mail or mail is received and resolves the incomplete forms, process the corrected forms, as appropriate.

  3. An applicable Form 8453 must be secured for the appropriate form.

  4. It is important that the Filer/ERO is notified as soon as possible when their Binary attachment is not an acceptable Form 8453 for the applicable return.

  5. Before a Transmitter sends a file electronically, a box must be marked showing that a Binary Attachment (i.e., Form 8453 Signature document) is included in the transmission. MeF Signature Options: IRS rules (Sample 1). If the box is marked but no Form 8453 scanned and PIN signatures are used, secure the Form 8453 to satisfy the intent of the marked box.

  6. Attempt to contact filer by phone call or voice message. If unable to reach, send applicable letter to resolve the following issues:

    • System unable to read binary attachment

    • Form 8453 Signature Document is not signed

    • Wrong form scanned as binary Form 8453 Signature Document

    • Wrong name/EIN on scanned binary Form 8453 Signature Document

  7. Request another Form 8453, if needed, as follows:

    • Request Fax (preferably) for Ogden e-help Desk 1-877-477-0575. For Form 8453-EX and Form 8453-EMP fax to 1-877-477-0569.

    • Advise filer, if mailing form, must put Attention E-File Unit, M/S 1056, Ogden, UT 84201. For Form 8453-EX and Form 8453-EMP mail form to 201 West River Center Blvd. Stop 2701G, Covington, KY 41011.

      Note:

      If no receipt of acceptable Form 8453 within 7 days, send applicable letter.

  8. Create an Interaction/Incident for each contact/request.

  9. When Form 8453 is received, complete the following:

    • Enter "290 for zero" action to send the printed 8453 to Files

      Note:

      BMFOLT must show "150" before "290 for zero" action

    • Send the faxed/mailed Form 8453 and "290 for zero" to Files

    • Update and close the Interaction/Incident

  10. If unable to make contact by phone and a Letter is Sent, complete the following before mailing out First letter:

    • Notate on the Contact/Error sheet the date the letter was sent

    • Notate the Applicable letter sent

    • Print a copy of letter to attach to error sheet

    • Enclose a return envelope - For Ogden - M/S 1056 and for Cincinnati - M/S 2701G must be present on the mailing and return envelopes

    When an acceptable Form 8453 is received in response to the letter of request, update and close the Interaction/Incident.

  11. If the letter is returned undeliverable and a valid address can not be determined, complete the following:

    • Enter Transaction Code (TC) 290 on the tax module on IDRS

    • Document this process on the returned letter

    • Use the Document Locator Number (DLN) from the TC 290 to place the undeliverable mail in files and enter DLN into Interaction/Incident

  12. If no response within 45 days, send a 2nd letter.

  13. After sending the second letter, close the Interaction/Incident (description: mm/dd/yy non-compliant. Notate sent 2nd letter.)

  14. If compliant to 2nd letter, upon receipt of an acceptable Form 8453 via fax, e-mail or mail, complete the following:

    • Add comments to Interaction/Incident (mm/dd/yy complied to 2nd letter)

    • Verify the correct form type for the transmitter return and ensure appropriately signed

  15. The correct Form Type for the transmitted returns are:

    • Form 8453-PE for return types Form 1065 MeF and Form 1065 On-Line MeF

    • Form 8453-B for return types Form 1065-B MeF and Form 1065-B On-Line MeF

    • Form 8453-C for return type Form 1120 MeF and Form 1120 On-Line MeF

    • Form 8453-S for return type Form 1120S MeF and Form 1120S On-Line MeF

    • Form 8453-I for return type Form 1120-F MeF and Form 1120-F On-Line MeF

      Note:

      $ amounts are not required.

    • Form 8453-EO for return types Form 990, Form 990-EZ, Form 990PF, Form 1120-POL MeF and On-Line MeF Programs

    • Form 8453-EX for return types Form 720, Form 2290, and Form 8849

    • Form 8453-FE for return type Form 1041

    • Form 8453-EMP for return types Form 940, Form 940-PR, Form 941, Form 941-PR, Form 941-SS, Form 943, Form 943-PR, Form 944, Form 945

    After receiving an acceptable Form 8453 in response to a phone contact or letter, complete the following:

    • Check BMFOLT - a Tax Year MUST have a PN or TC 150

    • Enter "290 for zero" action

      Note:

      BMFOLT must show "150" before "290 for zero" action

    Note:

    It could take 2 weeks for a received return to post; 3 weeks if the return is received towards the end of the week.

  16. If no response is received from the first or second letter and the total days exceed 90 days, the Team Leader or designated person will need to complete the following:

    • Close the Interaction/Incident and document the copy of the letter in the folder to show that no signature document was received

    • Keep a copy of each of the completed reports for record purposes

    • Recap the results on a spreadsheet and send a copy via e-mail to the designated national program analysts on a regular basis

  17. Open a new incident and relate to the original closed incident. (Description: mm/dd/yy non-compliant. Notate sent 3rd letter.)

    • Close Interaction/Incident

    • Keep a copy of each of the completed reports for record purposes.

    • Recap the results on a spreadsheet and send a copy via email to the designated national program analysts on a regular basis.

  18. Route the file to the Lead Tax Examiners for the following actions, if the response to a phone call/correspondence has not been received from the electronic filer within three weeks:

    1. Send the participant the appropriate letter.

    2. Forward a copy of the letter to the Field Office Operations.

    3. Reference the letter in the participant's Interaction/Incident.

    4. Note the action on the Forms 8453 tabs.

    5. Route the Forms 8453 to the suspense file.

  19. Contact the IRS Field Office Operations where the participant does business, if a participant is uncooperative, not locatable, or fails to supply a replacement Form 8453.

  20. The e-help Desk Manager must inform the Field Office Operations Director of all other communications with the filer.

3.42.4.7.1.7  (06-17-2016)
Signature Document Form 8453 Submitted to IRS in Error

  1. Original MeF Forms 8453 (Form 8453-C, Form 8453-S, Form 8453-I, Form 8453-PE, Form 8453-B, Form 8453-EX, Form 8453-EO, Form 8453-EMP and Form 8453-FE) should be retained by the taxpayer or ERO and not mailed to the Service unless requested.

  2. MeF Forms 8453 are to be routed to the Ogden e-help Desk, Attention E-File Unit, M/S 1056, Ogden, UT 84201.

    Exception:

    Form 8453-EX and Form 8453-EMP are to be routed to the Cincinnati e-help Desk at 201 West River Center Blvd. Stop 2701G, Covington, KY 41011.

  3. Research the Form 8453 using the RRD so that it can be determined if the form would need to be retained or sent back to the taxpayer or ERO. Also, research Interaction/Incident to see if the taxpayer or ERO is responding to a previous request for the Form 8453.

  4. Copies of Form 8453, marked copy or duplicate copy, received by the Service in error, may be destroyed as "classified waste" as they are not required to be filed with the Service.

  5. If a taxpayer or ERO has submitted an original Form 8453 to IRS that should have been retained in their file, contact the taxpayer or ERO by telephone or correspondence to explain the retention requirement and/or arrange to return the forms back to them.

3.42.4.7.2  (10-01-2013)
Practitioner PIN Option - Form 8879 and Form 8878-A for MeF Programs

  1. The business filer can also choose the Practitioner PIN Option, using the applicable Form 8879 that is retained by the ERO as part of the taxpayers record and is not to be sent to the IRS. The business filer can also choose to authorize the ERO to make electronic funds withdrawals using the Form 8878-A, IRS Electronic Funds Withdrawal Authorization for Form 7004, which is also retained by the ERO and not sent to the IRS.

  2. The Practitioner PIN Option can not be used by a Large taxpayer or by a taxpayer who is filing through an On-Line Provider. These filers must use the Form 8453 Option as the alternative signature.

  3. The Practitioner PIN Option consists of two PINs - one for the taxpayer and one for the Practitioner.

  4. The taxpayer chooses his own PIN that must be five numeric characters and cannot be all zeros.

  5. The Practitioner PIN is chosen by the ERO and must contain eleven characters. The first 6 characters are the EFIN of the ERO and the next five numeric characters are the EROs choice.

  6. The business taxpayer must decide whether they want to enter their own PIN or whether they want to authorize the ERO to use his selected PIN as the signature.

  7. To give an ERO authorization to sign the return, the taxpayer must use the applicable Form 8879, as follows:

    • Form 8879-C for Form 1120

    • Form 8879-I for Form 1120-F

    • Form 8879-S for Form 1120S

    • Form 8879-EO for Exempt Organization returns

    • Form 8879-PE for Form 1065

    • Form 8879-B for Form 1065-B

    • Form 8879-EX for Form 720, Form 2290 and Form 8849

    • Form 8879-EMP for Form 940, Form 940-PR, Form 941, Form 941-PR, Form 941-SS, Form 943, Form 943-PR, Form 944, and Form 945.

    • Form 8879-F for Form 1041

  8. Form 8878-A, IRS Electronic Funds Withdrawal Authorization for Form 7004, is used by persons authorized to sign an electronic funds withdrawal and an ERO to use a PIN to authorize an electronic funds withdrawal of the balance on an electronic Form 7004.

  9. Form 8879 and Form 8878-A must not be sent to the IRS. The ERO is required to retain the document as part of the taxpayer's record for 3 years from the due date or IRS received date, whichever is later, unless otherwise notified by the IRS.

  10. For more information about program requirements for MeF Programs review the following publications:

    • Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns

    • Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters

    • Publication 3112, IRS Application and Participation

3.42.4.7.2.1  (01-01-2010)
Processing Authorization Form 8879 and Form 8878-A for MeF Programs Submitted to IRS in Error

  1. Copies of Form 8879 and Form 8878-A, marked copy or duplicate copy, received by the Service in error, may be destroyed as "classified waste" as they are not required to be filed with the Service.

  2. If an ERO or taxpayer has submitted an original Form 8879 or Form 8878-A to IRS that should have been retained in their file, contact the ERO or taxpayer by telephone or correspondence. Explain the retention requirement and/or arrange to return the forms back to them. It is advisable to contact EROs who submit a significant volume of authorization forms to IRS in error as early in the filing season as possible to minimize future incoming receipts. When appropriate, contact the assigned RPO National Account Manager for assistance.

  3. For more information about program requirements for MeF Programs review Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns and Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters.Also review Publication 3112, IRS Application and Participation.

3.42.4.7.3  (09-14-2016)
Process for 94x On-Line Signature PIN Registration

  1. This section provides the guidelines and processing steps for handling signature documents for the 94x Forms Programs.

  2. Beginning Processing Year 2016, 94x MeF filers will be able to use the 94x PIN registration in MeF. 94x On-Line Signature PINs will be available to use for all tax years in MeF. If the taxpayer already has a 94x On-Line Signature PIN from 94x Legacy, it will not be necessary to reapply for a new PIN in the new MeF application. 94x Legacy PIN Registration data was migrated to the new 94x On-Line Signature PIN for MeF on the RRD.

  3. There are 4 signature methods for the 94x Program:

    • 94x On-Line Signature PIN

    • Reporting Agent PIN

    • Form 8453-EMP

    • Form 8879-EMP

  4. Form 8453-EMP and Form 8879-EMP are explained in IRM 3.42.4.7.1 through IRM 3.42.4.7.2.1.

  5. Reporting Agents are issued a 5 digit PIN used to sign 94x returns for their clients with a Form 8655, Reporting Agent Authorization, on record with IRS. Reporting Agents must submit Form 8655 with their Agent's List to the Ogden Accounts Management Center (OAMC) prior to completing their IRS e-file Application.

    Note:

    When the provider option of Reporting Agent is selected in the Third Party Data Store (TPDS) the system automatically validates the Reporting Agent File (RAF). If not on file the provider option is not allowed.

  6. The Third Party Data Store (TPDS) will automatically issue the 5 digit Reporting Agent PIN once the IRS e-file Application with the provider option RA has completed processing and will automatically issue the RA PIN letter.

  7. The 94x On-Line Filer is an individual who is the owner or a principle of a business authorized to sign and file the business’s 94x returns on their behalf; and they are referred to as the Authorized Signer. To participate in the e-file program they must purchase software that includes the 94x On-Line Signature PIN Registration application. An Authorized Signer for the business must complete the 94x On-Line PIN Registration which is transmitted to the IRS through a Third Party Provider to the Modernized e-File (MeF) System. The 94x On-Line Filer is not required to submit an e-file Application.

    Note:

    Beginning Processing Year 2016, all tax years and quarters in 94x MeF will accept the 94x On-Line Signature PIN.

  8. The 94x On-Line Signature PIN from Legacy has been migrated to the new 94x On-Line Signature PIN and is located on the MeF Return Request Display (RRD) and is accessed via the Employee User Portal (EUP). Taxpayers are not required to reapply for a new PIN.

    Note:

    Legacy PIN applications can also be referred to as migrated.

  9. Beginning January 2016, the 94x On-Line Signature PIN Registration will be located on the MeF RRD platform and accessed via the EUP. The application is received in applied status and based on the results of the review the application is manually changed by the employee and moved to the appropriate status. The status options are pending, approved, PIN activated, disapproved and deactivated. .

    Note:

    The registration mirrors return submissions processed on the MeF platform.

  10. Once approved, the MeF 94x PIN Registration System will automatically assign a 10-digit PIN and generate a letter. The 94x PIN should only be sent to and be used by the Authorized Signer as their signature on their business’s On-Line 94x returns that they file electronically. The following entities are not allowed access to the PIN information:

    • Contact

      Exception:

      The contact listed on the legacy applications is considered to be the Authorized Signer.

    • Power of Attorney (POA)

    • Electronic Return Originator (ERO)

      Exception:

      The ERO is filing the 94x returns on behalf of their own business and is the Authorized Signer.

    • Reporting Agent (RA)

      Exception:

      The RA is filing the 94x returns on behalf of their own business and is the Authorized Signer.

    • Payroll Company

      Exception:

      The payroll company is filing the 94x returns on behalf of their own business and is the Authorized Signer.

  11. The system will generate status letters ( LTR. 3081 or LTR. 3083) when required.

  12. For more information about program requirements for the 94x Programs review Publication 4163, Modernized e-File (MeF) Information for Authorized e-file Providers for Business Returns and Publication 4164, Modernized e-File (MeF) Guide for Software Developers and Transmitters. Also review Publication 3112, IRS Application and Participation.

3.42.4.7.3.1  (09-14-2016)
Processing Electronic 94x On-Line PIN Registration

  1. The PIN Registration Method is used to issue the business filers a 94x On-Line Signature PIN.

    Note:

    Effective January 2016, 94x MeF filers are able to use the 94x On-Line Signature PIN for all tax years.


    All submissions are received in XML format only. The request for the 10-digit PIN is transmitted via a MeF submission through the Integrated External Portal (IEP). The 94x On-Line Signature PIN Registration must be processed within 45 days of receipt.

  2. The 94x On-Line Filer, must purchase software that supports the 94x On-Line Signature PIN application in order to participate in the program.

    Note:

    The 94x On-Line Filer is not required to submit an e-file Application or apply for e-services to participate in the 94x On-Line Filing program.

  3. PIN Registrations are accessible to the e-help Desk via EUP - MeF 94x PIN Registration System, and are only accepted from Business Taxpayers filing through a Third Party Provider (Transmitter) for the 94x MeF Programs.

    Note:

    There is a special MeF role for the 94x On-Line Signature PIN on EUP. See IRM 3.42.4.1.1.1 for more information on user roles for EUP.

  4. Only one PIN is issued per EIN.

  5. The Authorized Signer will be required to submit their social security number (SSN). The SSN will be used to authenticate the Authorized Signer.

  6. The role of the contact on the new applications is as follows. The contact person is an individual who entered the PIN request on the ‘Authorized Signer’s’ behalf. They do not have the authority to know or use the 10-digit PIN. The only information that can be shared with them is the status of the MeF Form 94x On-Line Signature PIN Registration. For example, they can be advised that the PIN has been activated, but they cannot be issued the PIN. For security reasons the only changes they can request be made to the record is to update the ‘Contact Title’ and ‘Contact Phone Number. All other updates to the record must be made by the ‘Authorized Signer’.

  7. The role of the contact on the migrated applications is as follows. The Contact person on the migrated Legacy records is to be considered the Authorized Signer and the ‘Authorized Signer Title’ belongs to the Contact person listed. This person has full permission to access of all PIN Registration data.

    Note:

    Contact titles are no longer used to determine if the Authorized Signer can be approved for a 94x PIN. However, this information can be used as additional authentication probes.

  8. The MeF 94x PIN Registration System will automatically assign a PIN to the 94x On-Line Filer for signature purposes. Once all of the information has been entered into the system and approved, Letter 3083 will generate with the Statement of Receipt insert that must be returned by the 94x On-Line Filer.

  9. To initiate the process, the 94x On-Line Signature PIN Registration is accessed in EUP - MeF 94x PIN Registration System.

  10. Below are the status for the 94x On-Line Signature PIN:

    94x On-Line Signature PIN Registration Status
    Status Definition
    Failed New PIN Registration received, but did not pass NAP Validation or other business rule validation. The transmitter/software provider will receive an acknowledgement explaining the reason for the failed status. The customer is notified via their software provider that their application was failed. Customer should contact Business & Specialty Tax at 800-829-4933 to verify the legal name of the company.
    Applied New PIN Registration received. It has passed the NAP validation (EIN/NC) and is ready to be processed.
    Approved PIN Registration has passed all validity checks and the 10-digit 94x On-Line Signature PIN has been assigned to the customer. The Statement of Receipt has not been processed and/or received by the IRS.
    Disapproved TP received a 3081 letter disproving the registration. PIN Registration has passed NAP Validation but was not approved due to mismatch between the authorized signer’s SSN and name combination, a first or last name only, and/or two authorized signers listed on the application. The Justification of Change field is required when the registration is updated to Disapproved.
    PIN Activated A 10-digit 94x On-Line Signature PIN has been assigned to the customer and the Statement of Receipt has been processed by the IRS. The customer can immediately use their 94x On-Line Signature PIN to sign their e-filed on-line Form 94x returns.
    Pending Reserved for special circumstances. For example, a PIN Registration would be moved to Pending status if a Statement of Receipt was received without a signature. The Justification of Change filed is required when the Registration is updated to Pending, so an explanation would show on the History of Changes page.
    Deactivated The 10-digit 94x On-Line Signature PIN has been deactivated by the IRS and the e-file database will not recognize the PIN as a valid signature. Deactivation can be requested by the authorized singer. The PIN will also be deactivated if it is determined to be a compromised PIN by either the IRS or an authorized representative of the business. The Justification of Change filed is required when the registration is updated to Deactivated.
  11. Once the 94x On-Line Signature PIN is accepted in MeF, the status is automatically updated to Applied Status.

  12. The MeF 94x PIN Registration System - Applied Status list is used by the e-help Desk to research the request to determine whether it should be approved or denied. The requests are retrieved using the customer’s EIN.

  13. Verify the Authorized Signer via IDRS with command codes INOLES and/or ENMOD.

    Note:

    The Authorized Signer cannot be payroll companies, tax preparers, reporting agents, POAs or others who are using the 94x PIN Registration requesting a PIN on behalf of their clients.

    1. Verify that the Authorized Signer’s name control and SSN are correct in the registration.

    2. Verify that the taxpayer’s first name or variation of the first name is the same on the registration as in INOLES or ENMOD. If unsure, forward to the lead for determination.

    3. Verify that only one taxpayer is listed as the authorized signer on the application.

  14. If the PIN registration passed all validity checks, move to approved status. 3083 letter will automatically generate with the authorized signer’s 10-digit 94x On-Line Signature PIN and the Statement of Receipt.

  15. Once the Statement of Receipt is returned and signed by the authorized signer, move the PIN registration to PIN Activated status. The customer will be able to immediately use their 94x On-Line Signature PIN when the Statement of Receipt is processed.

3.42.4.7.3.2  (09-14-2016)
Invalid Application Procedures

  1. An application that does not pass the systemic business rule(s) validation (i.e. validated EIN and name control mismatch) will automatically be moved to failed status; and will not be forwarded to the e-help Desk for research. The customer will be notified by their transmitter/software of the failed submission.

  2. For an EIN name control mismatch, the customer will need to correct their name and/or EIN and resubmit their application through their software. If the customer cannot determine the correct name control and/or EIN, they will need to contact the Business and Specialty Tax Line at 800-829-4933.

  3. The PIN registration is moved to Disapproved status for the following:

    1. mismatch between the authorized signer’s SSN and name combination;

    2. a first or last name only; and/or

    3. two authorized signers are listed

  4. The Justification of Change field is required when updating to Disapproved status. Update this field with appropriate comments.

  5. PIN registration may also be updated to Disapproved status if it is determined that the PIN registration request is being misused. A PIN registration would be considered misused if a payroll company, tax preparer, reporting agent or others are requesting a 94x On-Line Signature PIN on behalf of their clients. These requests are usually identified by a number of requests using the same contact name and/or mailing address.

    1. Stop processing the identified requests and place in Pending Status.

    2. Use IDRS to validate the EIN and mailing address to ensure it belongs to the Contact’s business.

    3. Determine if the Contact signed returns for multiple EINs or acted as the Electronic Return Originator (ERO).

    4. Document findings in an EHSS incident.

    5. Document incident number in the Justification of Change field.

    6. Forward the incident to the business analyst via EHSS for determination.

    7. Move the PIN to Disapproved status after the determination is made confirming the misuse of the PIN registration.

    8. Enter appropriate comments in the Justification of Change field.

    9. Send an email that contains the customer’s First and Last name and mailing address to the designated Cincinnati clerical staff. They will maintain and share on a daily basis a file called "Misuse of 94x PIN Registration" .

  6. When the PIN registration is moved to Disapproved status, Letter 3081 is generated notifying the customer that their PIN registration was disapproved.

  7. The PIN registration is moved to Pending status for the following:.

    1. unsigned Statement of Receipt

    2. research is needed to determine if it is an appropriate request

  8. Enter the appropriate comments in the Justification of Change field when moving the PIN registration into Pending Status.

3.42.4.7.3.3  (09-14-2016)
Authorized Signer Change

  1. If there is a change in the Authorized Signer the authorized signer should notify the IRS of the change; request the PIN be deactivated so that a new PIN can be requested by the new Authorized Signer.

  2. If the Authorized Signer is no longer available the contact on the application can request that the PIN be deactivated so that a new PIN can be requested by or for the new Authorized Signer.

  3. Authenticate the caller to ensure the caller can legally bind the business or organization. To bind means that the caller has the ability to execute agreements that are contractual and legally enforceable against the company under state law.

  4. An authenticated caller not listed on the application may be advised as to whether or not a PIN Registration is on file for the company. If there is a PIN registration on file and the Authorized Signer is no longer available this individual may also request the PIN be deactivated.

  5. Inform the caller they must submit a new application through their software provider/transmitter to receive a 94x On-Line Signature PIN for the new Authorized Signer.

  6. Enter comments into the Justification of Change field and deactivate the current 94x On-Line Signature PIN.

    Note:

    94x On-Line Signature PIN must be deactivated before submitting a new application. The transaction is immediate so the customer can submit a new application immediately.

3.42.4.7.3.4  (09-14-2016)
94x On-Line Signature PIN Registration Change of Address Requests

  1. 94x On-Line Signature PIN Registration Change of Address Requests are handled by the Cincinnati e-help Desk.

  2. If customer chooses to make changes by phone, the request can only be made by the Authorized Signer after the Authorized Signer is authenticated.

    Note:

    The only other changes that can be requested by the authorized signer via telephone are Contact Name (Exception: a migrated legacy application), Contact Title, Contact Phone Number and email addresses.

  3. If customer chooses to make changes by mail or fax, the request must be on company letterhead and must be mailed or faxed to Cincinnati containing the following information:

    • EIN

    • Company name

    • Old address

    • New address

    • Contact name, title and phone number (if applicable)

    • Authorized Signer name and title, and

    • Authorized Signer signature

  4. If the customer needs a copy of the PIN letter advise them to add the following information to their request, "Copy of PIN letter needed" .

  5. Fax number for the Cincinnati e-help Desk is 1-877-477-0569.

  6. Mailing address for the Cincinnati e-help Desk is Internal Revenue Service, Mail Stop 2701, Cincinnati, OH 45999.

    Note:

    Inform the taxpayer that the change of address on PIN Registration will not affect the taxpayer's permanent IRS records. To change the address of a taxpayer's permanent records, the taxpayer has to submit Form 8822, Change of Address or Form 8822-B, Change of Address or Responsible Party - Business

  7. Clerical staff in Cincinnati will update the MeF 94x PIN Registration System with the corrected information and Submit.

  8. If it is determined that the PIN has been compromised, refer to IRM 3.42.4.7.3.6, PIN Registration, Compromised/Not Compromised.

3.42.4.7.3.5  (09-14-2016)
94x On-Line Signature PIN Registration Business Name or EIN Change

  1. The customer must notify the e-help Desk if there is a change to the PIN Registration Business Name or EIN.

  2. Authenticate the caller to ensure the caller is the Authorized Signer who can legally bind the business or organization.

  3. Inform the caller they must submit a new application through their software provider/transmitter to receive a 94x On-Line Signature PIN with their new name or EIN.

  4. Enter comments into the Justification of Change field and deactivate the current 94x On-Line Signature PIN.

    Note:

    94x On-Line Signature PIN must be deactivated before submitting a new application. The transaction is immediate so the customer can submit a new application immediately.

3.42.4.7.3.6  (09-14-2016)
94x On-Line Signature PIN Registration, Compromised/Not Compromised

  1. A 94x On-Line Signature PIN can be considered compromised when it is being used by an unauthorized user who is not listed on the 94x On-Line Signature PIN Registration. Regardless of IRS discovery or customer notification and advertent or inadvertent user, the e-help Desk will take corrective action to protect the integrity of the PIN.

  2. When taking a call regarding the PIN, verify you are speaking with the authorized signer or contact person if 94x Legacy PIN using the MeF 94x On-Line Signature PIN Registration. Before taking steps to reissue a PIN letter ensure address is correct on the MeF 94x On-Line Signature PIN Registration.

    Note:

    The only individual that is authorized to request an existing PIN to be reissued is the current Authorized Signer or Legacy Contact on the 94x On-Line Signature PIN Registration Application.

    1. If a caller is not the Authorized Signer or Legacy Contact person, ask the caller how they are affiliated with the company. If the caller states they are the owner, partner, or officer of the business and they are authorized to sign for the company, the assistor may acknowledge that a PIN registration exists after following authentication probes in the Authentication and Authorization Job Aid for on-line filers. The PIN is owned by the Authorized Signer or Legacy Contact listed on the application, not the company. It can only be disclosed to the Authorized Signer or Legacy Contact listed on the application.

      Note:

      PIN should never be given over the phone.

    2. If the caller thinks the application needs to be updated for any reason, refer to the following IRM references as appropriate, IRM 3.42.4.7.3.3, Authorized Signer Change, IRM 3.42.4.7.3.4, 94x On-Line Signature PIN Registration Change of Address Request, and/or IRM 3.42.4.7.3.5, 94x On-Line Signature PIN Registration Business Name or EIN Change.

  3. To determine if the PIN is compromised or not, follow the chart below:

    If and Then
    the PIN was never received/issued it has been less than 10 business days the PIN is not compromised.
    1. Assistor will check EUP - MeF 94x PIN Registration System to verify a PIN is in Approved status.

    2. Verify the Authorized Signer (Contact if 94x Legacy PIN) and address on record;

    3. Inform the customer the letter is in the mail.

    it has been more than 10 business days since the PIN was issued and the address is correct the PIN is not compromised.
    1. Verify the Authorized Signer (Contact if 94x Legacy PIN) and address on record

    2. Reissue letter per IRM 3.42.4.7.3.6 (4) or (5) below

    3. Notate actions in the Justification of Change field

    it has been more than 10 days since the PIN was issued and the address is incorrect the PIN is compromised.
    1. Verify the Authorized Signer (Contact if 94x Legacy PIN) and address on record

    2. Follow IRM 3.42.4.7.3.6 (9) below

    3. Notate change in the Justification of Change field

    the PIN was received but is not being accepted as the 94x Signature there is no record of a signed Statement of Receipt the PIN is not compromised
    1. Verify the Authorized Signer (Contact if 94x Legacy PIN) and address on record

    2. Advise the caller that they need to return the signed SoR to us before the PIN can be activated

    3. Notate EHSS interaction number in Justification of Change field

    the PIN was previously received the Authorized Signer (Contact if 94x Legacy PIN) does not currently have access to their PIN
    1. Ask the caller if they believe the PIN was compromised

    2. If the Authorized Signer (Contact if 94x Legacy PIN) states the PIN is not compromised, reissue PIN letter per IRM 3.42.4.7.3.6 (4) or (5) below and notate actions in the Justification of Change field

    3. If the Authorized Signer (Contact if 94x Legacy PIN) states the PIN is compromised and the address on the application is current, follow IRM 3.42.4.7.3.6 (8) below

    4. Notate reason for change in Justification of Change field

    an official of the company calls states the person currently listed as the Authorized Signer (Contact if migrated 94x Legacy PIN) on the application is no longer with the company or authorized to use the PIN
    1. Authenticate the caller to ensure he/she can legally bind the business or organization.

    2. Ask the caller if they want to change the Authorized Signer (Contact if migrated 94x Legacy PIN) on the application.

    3. If yes, the PIN is not compromised. Follow IRM 3.42.4.7.3.3, Authorized Signer change.

    4. If no, PIN is compromised. Deactivate the application and notate reason for change in Justification of Change field.

    an official of the company calls and states an unauthorized individual applied for a PIN without their knowledge

    Note:

    Authenticate the caller to ensure he/she can legally bind the business or organization.

    they received the PIN the PIN is not compromised.
    Determine if the caller:
    • would like the PIN deactivated, or

    • would like to initiate an Authorized Signer change per IRM 3.42.4.7.3.3

    • notate reason for change in Justification of Change field

    the unauthorized third party received the PIN the PIN is compromised.
    Determine if the caller:
    • would like the PIN deactivated and reapply for a new PIN, or

    • would they just want to deactivate the PIN

    • notate the reason for change in Justification of Change field

    they do not know who received the PIN the PIN is compromised.
    Determine if the caller:
    • would like the PIN deactivated and apply for a new PIN, or

    • would they just want to deactivate the PIN

    • notate the reason for change in Justification of Change field

    A third party calls has been issued a PIN in error Advise the caller they are not authorized and request an authorized representative to call. Since the caller is not authorized close Interaction/Incident.
    • notate the Interaction/Incident number in Justification of Change field

    Note:

    Follow disclosure guidelines, IRM 3.42.4.10.10, Disclosure and IRS e-file Application, if information indicates that disclosure occurred due to the compromised 94x PIN.

  4. If the call is received at any site other than Atlanta, Cincinnati or Ogden and the PIN needs to be reissued, an Incident should be created and then escalated to the Cincinnati/Ogden Lead I as the provider option. The Incident must include:

    1. Company EIN

    2. Name of the business applying for the PIN

    3. Name and phone number of the contact person

    4. Fax number of the contact, if the contact person requests the PIN 94x On-Line Registration Letter to be faxed

      Note:

      Do not offer to fax PIN Registration Letter. Generally, the assistor should not offer the fax option, however, if the customer asks for options the assistor can recommend to fax. If less than 45 days to a due date the assistor may recommend the customer fax the SoR. If fax is requested, add fax number to interaction description and interaction number in the Justification of Change field to document why the letter was reprinted and that it was being faxed to the customer per their request.

  5. Atlanta, Cincinnati, or Ogden e-help Desk will reissue the Letter 3083 accordingly.

    Note:

    The approved Letter 3083 contains three parts; assistor/clerk may reprint only the parts requested by the customer. It is not necessary to reprint the acceptance letter and Statement of Receipt if PIN is already activated. The denied Letter 3081 has only one page.

  6. Atlanta, Cincinnati, or Ogden e-help Desk will remind the caller that the Statement of Receipt accompanying the Letter 3083 must be signed and returned to the Cincinnati site before PIN can be activated.

  7. If a reprinted letter is requested for a migrated application. The letter will need to be manually recreated using a desktop letter housed on the specified SharePoint site. To recreate these letters you will need the authorized signer name, employer name, employer address, EIN, and PIN from the MeF 94x Signature PIN Registration application.

    • In the Justification of Change field enter the EHSS interaction number, document which letter has been recreated and printed manually and the creation date (MM-DD-YYYY).

  8. The Cincinnati e-help Desk receives compromised PIN Registration letters faxed to 1-877-477-0569. The letters must be submitted on company letterhead and contain the following:

    • Company's EIN

    • Company name

    • Contact name

    • Contact title

    • Phone number

    • Reason that customer believes PIN was compromised

    • The letter must be signed and dated by a principal with the company (owner, officer, partner, etc.). The signer’s name and title must be typed on the letter below the signature.

    • If there was a change of address the letter must also include the old address and the new address

      Note:

      If the fax is not received within 24 hours of the receipt of the Interaction, contact the customer.

  9. Customer calls to e-help Desk not located in Cincinnati, advise the customer to send a fax to Cincinnati as outlined above in IRM 3.42.4.7.3.6(8), create an Incident and escalate to the Cincinnati Leads Provider Group. The Incident must include:

    • Company EIN

    • Name of the business applying for the PIN

    • Name and phone number of the contact person

    • Reason it is believed the PIN is compromised

  10. The Cincinnati e-help Desk will determine if the 94x PIN is compromised and take corrective actions accordingly.

    1. Authenticate the caller

    2. Establish caller's relationship with the company

    3. Update Interaction/Incident with caller’s name, position with business and explanation stated for why the 94x PIN has been compromised

    4. 94x PINs found to be compromised require the following corrective actions:

      If Then
      PIN is compromised
      1. Deactivate current PIN Registration. Notate reason for action in Justification of Change field.

      2. Advise the caller a new 94x On-Line Signature PIN Registration must be submitted through their software in order to use the 94x On-Line Signature PIN.

      3. Advise caller it can take up to 45 days to process the 94x PIN registration.

      4. Inform the applicant of the new 94x PIN by mailing Letter 3083 approval Letter.

      5. Advise the caller they must sign and return the Statement of Receipt before the PIN can be activated.

3.42.4.7.3.7  (09-14-2016)
Authorized Signer on Statement of Receipt

  1. A valid signature can be printed, typed, rubber stamped, computer generated, or affixed by some other mechanical device. It may appear on either the “Signature of Authorized Signer” or “Printed Name of Authorized Signer” line. Examples of valid signatures include the following:

    • Signature stamp/rubber stamp

    • Printed name on signature line

    • Printed name on printed name line and signature line blank

    • Signature that may not be legible

    • Signature on the printed name line

    • Signature without a printed name line

    • Initials

  2. Since assistors and clerks are not expected to be handwriting experts, regulations allow us to presume that the signature on a return, statement or other document is the true signature of the person who actually signed the document, per IRM 3.11.13.12.7.

  3. If a call is received regarding the reason for the disapproval, access the 94x On-Line Signature PIN and any related EHSS incidents or interactions.

    If it is determined that the Authorized Signer is: then
    incorrect and the error was unintentional
    • advise the caller they will need to submit a new 94x PIN application

    • the approval letter will contain a Statement of Receipt that they will need to ensure the Authorized Signer signs and returns to the IRS before the PIN can be activated

    • Deactivate and leave comment in Justification of Change field

    incorrect and the error was intentional
    • advise the caller of proper use of the PIN and procedures to reapply if needed.

    • if there is evidence of disclosure, follow procedures in IRM 3.42.10.10, Disclosure and IRS e-file Application

3.42.4.7.3.8  (09-14-2016)
Undeliverable PIN Registration Letters

  1. When an undeliverable 94x On-Line Signature PIN Registration letter is received by the e-help Desk in Cincinnati, or in some instances Atlanta or Ogden, take the following actions:

    1. Update the 94x On-Line Signature PIN Registration with the new mailing address if provided by the U.S. Postal Service on the yellow change of address label and document the source of the change in the Justification of Change field. Reissue the appropriate letter.

    2. If the address is not present U/D in front of the second address line, document actions taken in the Justification of Change field then disapprove the request.

      Note:

      Do not print a letter in this situation as it will only generate another piece of mail that cannot be delivered.

  2. After the information has been entered the letter can be destroyed as classified waste.

  3. When an assistor receives a call requesting the status of the PIN registration, they should follow normal authentication procedures then follow IRM 3.42.4.7.3.4, e-file PIN Registration Change of Address Requests.

  4. Reissue letter.

3.42.4.7.3.9  (09-14-2016)
Justification of Change

  1. Each action taken on a submission has the Justification of Change field to document why an action was taken. The field allows for a maximum of ninety characters including spaces. A Justification of Change statement is required for all actions except for the following statuses:

    • Approved (optional)

    • PIN Activated (optional)

  2. Use the following standard Justification of Change Comments for each scenario listed.

    If Enter
    Action taken as a result of a telephone contact SD (enter number)
    SSN name control research results do not match the name control NC does not match
    SSN name control matches but the first name on the request does not match the first name on IDRS - Exception - A different variation on the first name, i.e. Steve and Stephen, Elizabeth and Liz/Beth is acceptable First name does not match
    SSN research does not deliver any INOLES or ENMOD matches No data available
    Unusual results on INOLES or ENMOD are delivered Other - and clearly describe the situation (e.g., Other - Date of death (DoD) appears with the SSN on IDRS; Other - Two names in the Authorized Signer field)
    Incomplete address Disapprove - Inc. address
    Undeliverable mail Disapprove - U/D
    PIN accidently deactivated Inadvertent action customer will be contacted
    Statement of Receipt was received but was signed by someone other than the Authorized Signer (AS) - treat as compromised PIN Comp. PIN SoR not s/AS s/(enter name signed by)
    The request is being disapproved because a payroll company, Reporting Agent or ERO have misused the system PIN Reg. Misused and enter the SD number

3.42.4.7.4  (09-14-2016)
Form 1041 e-file Program Signature Methods

  1. This section describes the applicable processing requirements of the electronic filer and the receiving Submission Processing Campus. Tax Examiners, e-help Desk and others assigned will complete the actions described throughout this section, as applicable. This section provides the guidelines and processing steps for handling signature documents for the Form 1041e-file Program. Although the Form 1041 e-file Program was retired October 2014, prior year signature forms must be maintained.

  2. Applicants using the Form 1041e-file Program have two signature methods, as follows:

    • By using Form 8453-F, U.S. Estate or Trust Income Tax Declaration and Signature for Electronic Filing, to sign Form 1041, U.S. Income Tax Return for Estates and Trusts, or

    • By using a Practitioner PIN (Personal Identification Number) using Form 8879-F, IRS e-file Signature Authorization for Form 1041.

  3. Form 8453-F (signature documents) may also serve as a transmittal for some paper attachments, i.e., paper check for balance due returns and multiple signature listings.

    Note:

    Form 8453-FE will be used for taxpayers filing through MeF. This form cannot be used as a transmittal. It must be attached as a binary attachment. Multiple Tax Return Listings cannot be attached to Form 8453-FE.

  4. A fiduciary and an Electronic Return Originator (ERO), filing the estate's or trust's return, can also consent to electronic funds withdrawal, as applicable.

  5. When the PIN option is not used in filing Form 1041, the return is not considered legally filed until a completed Form 8453-F, signed by the Fiduciary, is received by the Ogden Submission Processing Center (OSPC). Publication 1437 states the time period for submitting Form 8453-F is three business days after acceptance of the electronic submission of the return. However, properly completed and signed Form 8453-F received after the 3 day period will be considered legally filed.

  6. Form 8453-F:

    1. Authenticates the return. A return that is not signed using the practitioner PIN method and a Form 8879-F is not considered valid without a signed Form 8453-F;

    2. Authorizes the participant to transmit the return electronically for the Form 1041 Program via e-file, on behalf of the entity, if the participant and the entity are not the same person;

    3. Provides a transmittal for any associated paper documents;

    4. Authorizes the IRS to send the participant and/or transmitter an acknowledgment of receipt of transmission, an indication of whether or not the return is accepted, and, if rejected, the reason(s) for the rejection; and

    5. Authorizes Electronic Funds Withdrawal from the taxpayer's account for the Form 1041 returns only, via Form 8453-F.

  7. Advise applicants the Form 8453-F must always be signed by the person authorized to sign the paper return, and by the paid preparer, if applicable.

  8. Advise participants Form 8453-F must be received for every accepted electronic return and all signatures required to file on paper are also required for the electronic return. If a signedForm 8453-F is not received the return is not considered filed and the estate or trust may be assessed the Failure to File penalty.

  9. Use Command Code (CC) ELFRQ to request Form 8453-F. To request the electronic return, CC TRPRT must be used for tax years 1998 forward. See IDRS Command Code Job Aid for processing details.

3.42.4.7.4.1  (09-14-2016)
Numbering Unit Procedures for Form 1041e-file Program

  1. The Numbering Unit should complete the following actions:

    1. Stamp each Form 8453-F with a Document Locator Number (DLN).

    2. Put no more than 20Forms 8453-F Multiple Listings per folder.

    3. Put no more than 25 folders per batch for Multiple Listings.

  2. Prepare Form 1332, Block and Selection Record, for each block of work. In the top right margin, enter the 6 digit Control Number, starting with the numbers below, then complete the following edits to information as follows:

    1. Use 910000 for Program Code 42933 for Form 8453-F Single Listings.

    2. Use 930000 for Program Code 42930 for Form 8453-F Multiple Listings.

    3. Increment one number (i.e., 930001) with each new block of work.

    4. In the date box on top of the form, enter the received date of the Form 8453-F, using mmddyy format.

    5. Enter the number of documents in the block in the count code.

    6. Route completed work back to the e-help Desk to be worked.

3.42.4.7.4.2  (09-14-2016)
e-help Desk Instructions for Form 1041e-fileForm 8453-F Process

  1. The e-help Desk receives Form 8453-F from various sources. The sources for prior years are:

    • C and E

    • Direct fax from taxpayers

    • Mail from Receipt and Control

      Note:

      Prior year Form 8453-F are researched by e-help before they are processed to determine if they are needed.

3.42.4.7.4.3  (09-14-2016)
EFS Reports for Correcting Form 8453-F Received for Form 1041

  1. Resolve and correct the discrepancies made in processing Form 8453-F using the following reports. These reports aid in ensuring the IRS receives all Forms 8453-F for e-filed Form 1041 and that they are required and complete. Use the following Run output files found on Control D to research and correct the Forms 8453-F:

  2. EFS 3747 Business Electronic Filing (Form 1041) ELFUPB Change Report – shows the corrected EIN after inputting of CC ELFUPB. This report should be checked the next business day after the ELFUPB corrections have been input to verify changes were accurately submitted. The report contains the following information:

    • Year (equals list year)

    • B/S (stands for Bought and Sold - obsolete)

    • EIN

    • New 8453-F DLN

    • Old 8453-F DLN

    • EIN-ERR-MSG - for example, "EIN Not Present."

  3. EFS 4544 8453 Research Report – shows the EIN and DLN of both the 1041 and 8453-F. This is also referred to as the ELFRQ Report. This report should be worked as needed to resolve issues. It is used to determine the status of 8453-F received by the e-help Desk. The report contains the following information:

    • List Year

    • EIN

    • 8453-F DLN

    • Return DLN

    • Employee IDRS Num

    • Requester IDRS Num

    • Remarks

3.42.4.7.4.4  (09-14-2016)
Procedures for Correcting Prior Year Form 8453-F for Form 1041e-file Program

  1. To resolve prior year Form 8453-F discrepancies use IDRS, EFS reports and the following procedures:

    Step Form 8453-F Single without attachments If Yes.... If No....
    1 Research TRDBV for applicable year:
    2 Is "SIGNATURE" option present? This means return was signed with a PIN and Form 8453-F is not needed. Destroy as classified waste.
    1. Use IDRS CC ELFRQ "4 " for the applicable year. Search by EIN. The following business day check EFS 4544 to verify results of the ELFRQ action.

    2. If DLN is present destroy Form 8453-F as classified waste.

    3. If no DLN complete steps 3 - 5.

    3 Are Name and EIN present and do they match IDRS records? Continue Continue
    4 Is signature of fiduciary or officer representing fiduciary present? Continue
    1. Create an Interaction/Incident (open and closed).

    2. Edit Interaction/Incident number on Form 8453–F.

    3. Return Form 8453-F to ERO/TP with Letter 4684.

    4. Include a blank Form 8453-F for requested year and a return envelope.

    5 Is the signature on the correct line? Send valid Form 8453-F to Numbering for DLN. Red arrow to the correct line and send valid Form 8453-F to Numbering for DLN.
    6 Has Numbering returned PY Form 8453-F with DLN? To establish record on IDRS use CC ELFUPB "C" to enter EIN for the new DLN and send to files. Wait to obtain DLN and continue processing.
  2. When ERO/TP responds to correspondence sent, update Interaction/Incident add "mm-dd-yy Complied via mail or fax" as applicable. Process Form 8453-F following the procedures outlined above in IRM 3.42.4.7.4.4 (1).

3.42.4.7.4.5  (09-14-2016)
Procedures for Processing Prior Year Multiple Return Listing for Form 1041e-file Program

  1. To resolve processing issues for Form 8453-F and Multiple Return Listing(s) the e-help Desk should use IDRS, EFS reports and the following procedures (Exception: If an issue can be resolved with a telephone call to the taxpayer, this is acceptable):

    Step Form 8453-F with Multiple Return Listing If Yes.... If No....
    1 Research TRDBV for applicable year to determine if the multiple listing is needed.
    2 Is SIGNATURE option present? This means that returns listed on the multiple return listing were signed with a PIN and Form 8453 is not needed. Destroy as classified waste.
    1. Use IDRS CC ELFRQ "4" for the applicable year. Search by EIN using several of the EINs listed on the multiple return listing. The following business day check EFS 4544 to verify results of the ELFRQ action.

    2. If the DLNs are present for the EINs searched, destroy Form 8453-F as classified waste

    3. If no DLNs present, complete steps 5

    3 Is the Name present? Continue Continue
    4 Is the EIN present on the front page of Form 8453-F? Line through the EIN and continue Continue
    5 Is signature of fiduciary or officer representing fiduciary present? Continue
    1. Create an Interaction/Incident (open and closed).

    2. Edit Interaction/Incident number on Form 8453–F.

    3. Return Form 8453-F and multiple listing to ERO/TP with Letter 4686.

    4. Include a blank Form 8453-F for requested year and a return envelope

    .
    6 Is the signature on the correct line? Edit and highlight MULTIPLE LISTING across the top of the Form 8453-F. Then send Form and attached multiple listing to Batching.
    1. Red arrow to the correct line.

    2. Edit and highlight MULTIPLE LISTING across the top of the Form 8453-F.

    3. Send Form and attached multiple numbering for DLN.

    7 Has Numbering returned PY Form 8453-F with Multiple Listing with DLN? To establish record on IDRS use CC ELFUPB “C” to enter EIN and DLN for each EIN listed on the Multiple Listing and send to Files. Wait to obtain DLN and continue processing.
  2. When ERO/TP responds to correspondence sent update Interaction/Incident add mm-dd-yy Complied via mail or fax as applicable. Process Form 8453-F following the procedures outlined above in IRM 3.42.4.7.4.5 (1).

3.42.4.7.4.6  (09-14-2016)
Form 8879-F Processing for Form 1041e-file Program

  1. Instead of filing Form 8453, a fiduciary filing the estate's or trust's return through an Electronic Return Originator (ERO) can sign the return using a personal identification number (PIN). For details see Form 8879-F, IRS e-file Signature Authorization for Form 1041.

  2. Form 8879-F must be retained by the ERO and should not be sent to the IRS. The ERO is required to retain the document as part of the taxpayer's record for three years after the due date of the return, unless otherwise notified by the IRS. For additional information review Form 8879-F instructions.

  3. In some instances, the ERO successfully transmitted the electronic return; however, the IRS did not receive the taxpayer's PIN (electronic signature). EROs may erroneously submit a Form 8879-F in reply to an IRS request for a signed Form 8453-F.

    1. Return the Form 8879-F, using Letter 4687, to the originator informing them that they are still required to submit the appropriate Form 8453-F. Originators may submit a completed Form 8453-F without a signature if they attached the Form 8879-F signed by the taxpayer(s). In instances where the faxed Form 8453-F and Form 8879-F are received in response to an IRS request, faxed signatures are legally sufficient.

    2. Inform the e-file provider that failure to comply may result in suspension from the IRS e-file Program.

  4. Destroy Form 8879-F received by the Service. These should be considered "classified waste" as they are not required to be filed with the Service.

3.42.4.8  (01-01-2009)
Processing Business IRS e-file Applications and Enrollment Forms

  1. Tax Examiners and Systems Administrators will use multiple systems to complete the IRS e-file application process for Business e-file returns. This section provides processing guidelines to assist the e-help Operation with verifying Trading Partner transmissions, receipts, and acknowledgments for Business e-file Programs.

3.42.4.8.1  (10-01-2010)
EHSS CRM (Customer Relationship Management) Application

  1. The "e-help Support System" is available for use as a support tracking tool. This application provides a customer's contact history with the e-help Operation, with each call, fax, e-mail, etc. received. This information is captured in what is known as an "Interaction/Incident" .

3.42.4.8.2  (10-01-2016)
Form 8655 Reporting Agent Authorization

  1. Form 8655, Reporting Agent Authorization, is used by a Taxpayer to designate a Reporting Agent to prepare, sign and file specific Federal returns, electronically. The form is primarily used in conjunction with 94x MeF Forms. Form 8655 is also used for making Federal tax payments and Federal tax deposits.

  2. Form 8655 grants the Reporting Agent different authorities, as indicated on the form when originally submitted. For clarification of Reporting Agent authorization, see IRM 21.3.9.3, Authorizations - Form 8655, Reporting Agent Authorization.

  3. A Reporting Agent ("Agent" ), is an accounting service, franchiser, bank, service bureau, or other entity authorized by its client to prepare, sign and file Employment Tax Returns electronically. Reporting Agents also make Federal tax payments and submit Federal tax deposit information and Federal tax payment information electronically for the taxes reported on the following forms:

    • Form 720, Quarterly Federal Excise Tax Return

    • Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return

    • Form 940-PR, Planilla para la Declaración Federal Anual del Patrono de la Contribución Federal para el Desempleo (FUTA)

    • Form 941, Employer's QUARTERLY Federal Tax Return

    • Form 941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono

    • Form 941-SS, Employer’s QUARTERLY Federal Tax Return (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands)

    • Form 944, Employer's ANNUAL Federal Tax Return

    • Form 943, Employer's Annual Tax Return for Agricultural Employees

    • Form 943-PR, Planilla para la Declaración Anual de la Contribución Federal del Patrono de Empleados Agrícolas

    • Form 945, Annual Return of Withheld Federal Income Tax

    • Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation

    • Form 1041, U.S. Income Tax Return for Estates and Trusts

    • Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

    • Form 1120, U.S. Corporation Income Tax Return

    • Form 1120-C, U.S. Income Tax Return for Cooperative Associations

    • Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations

    • Form 8868, Application for Extension of Time to File an Exempt Organization Return

    • Form CT-1, Employer's Annual Railroad Retirement Tax Return

  4. Tax Examiners should advise applicants a separate authorization, Form 8655, must be submitted for each Taxpayer on the Reporting Agent's List and the list must contain each Taxpayer's Employer Identification Number (EIN).

  5. Advise participants to mail all Forms 8655, with the Reporting Agent's Listings to the following Ogden address:

    Internal Revenue Service
    Accounts Management Campus
    MS 6748 RAF Team
    1973 North Rulon White Blvd.
    Ogden, Utah 84404

  6. Filers can also fax the Form 8655 to (801) 620-4142.

  7. Form 8655 is:

    • Submitted by Reporting Agents for each client

    • Authorization for the Reporting Agent to receive correspondence

    • Applicable to paper and electronic returns and Federal Tax Deposits (FTDs)/payments via the Electronic Federal Tax Payment System (EFTPS)

    • Stored on Reporting Agent File (RAF) data base

    • Effective for the quarter the Agent notifies IRS that the employer is added

    • In effect until revoked by the Taxpayer, terminated in writing from the Reporting Agent, or terminated by the Internal Revenue Service

    • Used to terminate a Reporting Agent Authorization by signing with another service provider

  8. Tax Examiners and Taxpayer Service Representatives (TSRs) should honor all requests from a Reporting Agent for information or adjustments to an account for which the Taxpayer has given authorization. Check the Reporting Agent File (RAF) to determine if the Reporting Agent Authorization:

    • Is current

    • Applies to the filing period for the return in question

    • Gives authority to receive correspondence

  9. Accept any authorized instrument which clearly contains the same information required to be provided on Form 8655 as a valid authorization.

  10. TPDS has information to determine if an authorization is present before completing the IRS e-file application approval process.

    Note:

    Validity of RAF is done automatically through TPDS.

  11. When dealing with a third party, check the Centralized Authorization File (CAF) and the Reporting Agent File (RAF) before corresponding. Refer to the following:

    • Form 2848, Power of Attorney and Declaration of Representative, also referred to as "POA"

    • Form 8821, Tax Information Authorization, also referred to as "TIA"

    • Form 8655, Reporting Agent Authorization, also referred to as "RAA"

  12. Form 8655 does not affect any aspect of POA/TIA forms.

3.42.4.8.3  (10-11-2011)
Completing RAF Processing

  1. For complete RAF processing instructions for Form 8655, review IRM 21.3.9, Processing Reporting Agents File Authorizations.

  2. Research the RAF data base which contains all authorizations for Reporting Agents and their clients. If there is any question about the status of a Reporting Agent, this file will provide information about their clients and whether or not they are authorized to receive copies of correspondence.

  3. If the Taxpayer has authorized the Reporting Agent to receive copies of correspondence, set an indicator at Master File. This information is used by Notices Processing Unit to send correspondence to both the Reporting Agent and the Taxpayer.

  4. Research the Federal Tax Deposit Codes found on the entity records for the taxpayer to determine Reporting Agent Authorizations on file. For more information, see IRM 3.42.4.4.2.3.

  5. Authorizations granted by Form 8655 apply to returns filed by paper and electronically and for Federal Tax Deposits (FTDs). Form 8655 does not affect any aspect of POA/TIA forms which offer wider, more general authorizations.

  6. For additional processing information review IRM 21.3.9, Processing Reporting Agents File (RAF) Authorizations.

3.42.4.8.4  (10-12-2010)
Maintaining Interaction/Incident

  1. Maintain Interaction/Incident, as required in IRM 3.42.7.4 (1), Introduction to the e-help Support System (EHSS). All contacts require an Interaction/Incident.

  2. Refer to IRM 3.42.7.5, Interaction Details, for how to create and document the Interaction/Incident.

  3. Andover e-help Deskmust complete the following actions before generating the approval letter:

    1. Validate the Form 8655 information on RAF

    2. Add comments to the TPDS and use the EHSS Application to update the taxpayer's Interaction/Incident, if applicable

3.42.4.9  (10-01-2015)
Receiving and Controlling MeF Test Transmissions

  1. This section provides the general guidelines for the Testing Process used for the MeF business programs. The e-help Manager must ensure all duties regarding Receiving and Controlling Test Transmissions are performed correctly and all the test transmissions received are reviewed for completeness. Site Coordinators, e-help Desk and others assigned will complete the actions described throughout this section, as applicable.

  2. All electronic filing applicants planning to develop software and/or transmit return data directly to the IRS, must complete the testing process using the assigned test ETIN before the IRS will accept them into IRS e-file.

  3. MeF participants should notify e-help Operations at 1 (866) 255-0654 when they are ready to test. If the site receiving the call is not the testing site then an Interaction/Incident must be opened and transferred to the correct site.

  4. Advise prospective participants of the following information, as applicable:

    • A test transmission must be submitted for compatibility testing as required by the applicable revenue procedure. These test transmissions should be received well in advance of the return due date.

    • Test data must be transmitted on the same medium that will be used when transmitting live data.

    • Participants must complete applicable testing to ensure the returns they transmit are formatted according to IRS specifications.

    • Test transmissions must be in the same blocking configuration format that will be used for live production.

    • Software Developers must complete testing of software to ensure the software meets the specifications provided by IRS.

    • Reporting Agents that transmit returns must begin testing after receiving the validated Reporting Agent’s List.

    • When ready to begin testing, the prospective participant must contact the Processing Campus.

    • The transmission of a test file does not constitute filing of a tax return. The test only ensures the participant knows how to use the software packages.

    • A successfully completed test transmission is required for all forms and schedules they intend to file.

    • Participants must complete and submit a questionnaire indicating their software limitations.

  5. For a list of applicable Revenue Procedures and other reference materials, see IRM 3.42.4.1.2.

3.42.4.9.1  (10-01-2015)
Electronic Specifications and MeF Testing Due Date Information

  1. Applicable Electronic Specifications must be followed by participants in order to complete a successful transmission test. Advise filers of the business publications with file specifications and program criteria, as follows:

    • Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns

    • Publication 4164, Modernized e-FIle (MeF) Guide for Software Developers and Transmitters

    • Publication 5078, Modernized e-File (MeF) Test Package (Business Submissions)

  2. Testing Due Dates are determined by the type of return that will be filed. The following subsection contain the applicable testing due dates MeF Program.

  3. Advise electronic filers required to test of the following:

    • To submit test transmissions by the dates specified in the applicable revenue procedure

    • To notify the e-help Operation when the electronic filer is ready to test

    • To expect notification of any changes to testing due dates

  4. Advise Software Developers of the following:

    • When software packages and communication systems are used by more than one Transmitter, they need to pass an assurance test only once a year

    • Their systems must provide the same software capabilities to all the users

    • Once communication systems and software packages have tested successfully, they may then be used by all accepted participants

  5. If the e-help Manager can determine that the electronic filer has a reasonable explanation for the delay in responding to the request for a replacement file, the approval process may continue without duplicating steps already completed.

3.42.4.9.2  (10-01-2016)
MeF Assurance Testing System (ATS) and Communications Testing Criteria and Dates

  1. This section provides information for completing the MeF Assurance Testing System (ATS) process. For all MeF Forms, refer to Publication 4164, Modernized e-File Guide for Software Developers and Transmitters. All Software Developers are required to perform MeF System testing. For processing year 2016, MeF System Assurance Testing begins October 31, 2016.

    Note:

    For all MeF Programs, it is strongly recommended that Software Developers use the ATS system to retest when there are schema changes (minor or major).

  2. Electronic specifications for testing criteria for all MeF Business Returns can be found in Publication 5078, Modernized e-File Test Package (Business Submissions). Test scenarios will be posted to the irs.gov website.

  3. All Transmitters must perform a Communications Test and be accepted. No further communications testing is required when additional forms are added to MeF and you are not required to test each year. IRS allows two means of transmission for MeF: Internet Filing Application (IFA) and Application to Application (A2A). Communications Testing with approved software begins anytime after October 31, 2016.

    • If the transmitter will be sending submissions through IFA, the transmitter must perform the communications test through IFA.

    • If the transmitter will be sending submissions through A2A, the transmitter must perform the communications test through A2A.

    • If the transmitter will be sending submissions through both portals, the transmitter must perform the communications test through IFA and A2A.


    A Software Developer who will not transmit need not perform a communications test. All forms, schedules, or binary/PDF attachments are not required to be supported for a communications test.

  4. Prior to testing, all Software Developers and Transmitters must receive the following items through the application process:

    • Electronic Transmitter Identification Number (ETIN)

    • Electronic Filer Identification Number (EFIN)

    • Password

    The password is an eight digit alpha/numeric password that is used for testing and production.

  5. All MeF System participants should notify the e-help Operation at 1 (866) 255-0654 when they are ready to test. If the site receiving the call is not the testing site then an Interaction/Incident must be opened and transferred to the correct site.

3.42.4.9.3  (10-01-2016)
Software Identification (ID) Number

  1. The Software Identification (ID) number assigned to tax preparation packages will be an eight digit number given during testing. The Software ID number is generated in the Third Party Data Store (TPDS) by e-help Desk. The format of the number is "YYNNNNNN." The "YY" is the two digit tax year for which the product is being developed. For example, Software IDs assigned for Tax Year 2015 will begin with 15.

  2. Starting processing year 2017, the Software ID for the 94x Annual forms (Form 940, Form 940-PR, Form 943, Form 943-PR, Form 944 and Form 945) will be in the format “YY88NNNN” starting with Tax Year 2017 and for the 941x Quarterly forms (Form 941, Form 941-PR and Form 941-SS) the format will be “YY99NNNN” starting with Tax Year 2018. For example, Software IDs assigned for Tax Year 2017 94x Annual forms will be “1788NNNN” and for Tax Year 2018 941x Quarterly forms will be “1899NNNN”.

  3. Each software package receives its own ID number. Once the software packages have passed, the Site Coordinator will verify the appropriate updates are included on TPDS, the e-help Acceptance Testing Spreadsheet, and the appropriate Acceptance Letter template via EHSS email has been sent.

  4. The e-help Acceptance Testing Spreadsheet should include the following information:

    • EHSS case number

    • Company Name

    • Software Package Name

    • Software Package ID Number (SIN)

    • Testing passed date

3.42.4.10  (10-01-2015)
Communicating and Correcting MeF Problems

  1. This section provides guidelines for Tax Examiners, regarding communicating and correcting problems in processing of IRS e-file applications, testing requirements and returns.

  2. Use e-help Support System (EHSS) to provide support to IRS external customers. To log into the system, a User ID and Password are required. Complete an OnLine 5081 Application to get a User ID and Password. Review IRM 3.42.7, EPSS Help Desk Support, for complete guidelines.

  3. Tax Examiners assigned to handle the processing of the electronic Test transmissions should complete the following actions:

    1. Call the applicant and give them your name and phone number.

    2. Let applicants know that you will be their contact at the e-help Desk during the testing process.

    3. Ensure the applicant understands that you are there to help with any problem they have and that they can call you any time.

    4. Explain that if you are not there, they may leave you a message or they may call the backup person who has also been assigned.

  4. Tax Examiner's time spent to help the tester varies as follows:

    • Time needed to help applicants will be different based on what is required by the applicant.

    • Experienced applicants may need very little help.

    • Less experienced or new applicants may want you to go over every error step-by-step.

  5. Tax Examiners should try to get participants to correct their own errors as much as possible.

  6. Tax Examiners should complete the following actions:

    1. Call the contact person listed on the application for clarification of all Worklist items.

    2. Generate a status letter to advise the applicant of the issues that need to be resolved, if two telephone calls have been unsuccessful, one in the morning and one in the afternoon.

    3. Request the applicant to provide the information needed to complete the application. Worklist items remain on the system as assigned to the employee until completed.

  7. Tax Examiners should adhere to the following:

    1. List all Worklist items on the data base if the application is incomplete.

    2. Work all Worklist items until completed. If the applicant does not provide the missing or corrected information for the application, he or she cannot participate in the Electronic Filing Program.

    3. Enter or update the information from the application which will be stored in the TPDS, if the application is complete.

    4. Ensure all Worklist items are closed on the system, when finished.

  8. Tax Examiners should complete the following actions once the signed and completed application is received:

    1. Include the applicant's name on the mailing list and send out the appropriate procedures, file specifications, and record layouts as required by the applicable program. The mailing list is also used to ensure that the applicants are included in dissemination of any updates to the applicable documents.

    2. Generate an acknowledgment letter, prepared at the e-help Desk, to the applicant.

    3. Maintain a record of all the phone calls to each applicant via the EHSS via the applicant's Interaction/Incident. Any time you are unable to obtain the needed information to return a call timely, inform the applicant of the status and reason for delay.

    4. Keep a record any time an applicant indicates there has been a change to the information we have previously recorded. Ensure the database has been updated via the EHSS, and via the applicant's Interaction/Incident.

  9. The Lead Tax Examiner will review the records to determine recurring problems.

3.42.4.10.1  (10-01-2013)
Use of Fax and Signature Stamps in Taxpayer Submissions

  1. In May 2003, the Tax Administration Council (TAC) approved the expanded use of faxes for receiving information and documents from taxpayers and practitioners in circumstances where contact with the taxpayer has been made and documented, and faxed signatures are legally sufficient. On September 23, 2011, a revision to the IRS’s fax policy was announced by the Deputy Commissioner for Services and Enforcement relating the consents to assess additional tax and closing agreements.

  2. On November 19, 2015, a further revision to the IRS’s use of fax policy was announced. It is available here http://irweb.irs.gov/AboutIRS/co/dcse/memo/48254.aspx.

3.42.4.11  (01-01-2009)
Handling An Incomplete e-file Application

  1. There are several actions required to handle the receipt of an incomplete e-file application. Review IRM 3.42.10, Authorized IRS e-file Providers for instructions on completing the required actions.

3.42.4.12  (10-01-2015)
IRS e-file Application Approval Process

  1. This section provides guidelines for completing the IRS e-fileApplication Approval Process. All EPSS e-help Desks can handle enrollment forms for any MeF Program.

  2. Before approving participation in the Business e-file Programs, all applications must be fully processed.

    Note:

    This means that the RAF must be reviewed to ensure the Reporting Agent information is present before generating the approval letter. If the Reporting Agent information is missing or not correct, notify the OSPC RAF Unit so the RAF can be updated.

  3. Ensure testing has been successfully completed, as applicable by:

    • Transmitters

    • Reporting Agents (that transmit returns only)

    • IRS Financial Agents

    • Software Developers

  4. 94x On-Line Filers filing through a third party Transmitter are not required to test.

  5. The 94x On-Line Filer must sign and return the 94x On-Line Filer Statement of Receipt from the 3083 Security Letter, indicating the receipt, the responsibility for the proper use, and the safeguarding of the 94x On-Line Filer PIN that was received to sign all 94x e-filed returns.

  6. Federal Agencies filing via EFTPS for Federal Agencies do not need to test.

  7. Any approval remains in effect unless the electronic filer:

    • Fails to comply with the requirements set forth in the Revenue Procedure, and/or

    • Is suspended from the Business e-file Programs

  8. Review IRM 3.42.10, Authorized IRS e-file Providers, for instructions on completing the required actions for the IRS e-file Application Process.

3.42.4.12.1  (01-28-2011)
e-file Approval for Software Developers

  1. Approval for a Software Developer as an electronic filer:

    1. Establishes only that the electronic test transmissions are formatted properly and may be processed by the Service,

    2. Is not an endorsement by the Service of either the software or the quality of services provided by the Software Developer, and

    3. Does not entitle the Software Developer to electronically file electronic forms unless the developer also applies and is accepted into the electronic filing programs as an ERO, Reporting Agent and/or a Transmitter.

3.42.4.12.2  (10-01-2016)
Suspension From IRS e-file Programs

  1. This section provides guidelines for the e-help Desk related to suspension of participants from IRS e-file Programs. It also describes the rights of the participant and the rights of the IRS to assess penalties.

  2. All decisions on revocation or denial of filing privileges must be documented within the Interaction/Incident and the e-file participant must be notified in writing of the decision. The letter should reference the following points:

    • The governing Revenue Procedure

    • Indication of acceptance of a specific tax return, (if applicable)

    • Reason for revocation or denial of filing privilege with specific section of revenue procedure which was not fulfilled satisfactorily, (if applicable)

    • Name and telephone number of the e-help Manager

  3. The letter should also be prepared for the signature of the Submission Processing Campus Director, if the permission to file is revoked or denied.

  4. The e-help Manager, as applicable, should notify the SPEC Territory Manager whether or not the participant is to stay in the program.

  5. If the participant is to remain in the program:

    1. Caution the participant , and

    2. Maintain documentation in the Interaction/Incident

    When the participant is removed or suspended from the program,

    • Telephone the participant explaining that he or she can no longer file electronically with the Service.

    • Confirm the removal or suspension by issuing a letter signed by the Director, EPSS within 3 working days.

    • Immediately inform the SPEC Territory Manager of the removal or suspension.

  6. The Service reserves the right to deny or suspend an Electronic Filer from the Electronic Filing Programs for violation of the governing revenue procedures.

  7. Some of the general reasons for suspension are as follows:

    • Submission of returns for which the service did not receive authorization

    • Transmission format deterioration

    • Cumulation of unacceptable error rate

    • Violation of advertising standards

    • Preparation of returns using unethical practices

    • Misrepresentation of tax return information on the return

    • Submission of untimely, incomplete, illegible, altered or unapproved applicable forms such as the enrollment form, signature document, etc.

    • Demonstration of conduct that adversely reflects on the electronic filing programs

    • Failure to comply with request for missing information

    • Significant complaints about performance as an Electronic Filer

    • Conviction of any criminal offence under the revenue laws of the United States or of a state or other political subdivision

    • Review other reasons to deny participation in Publication 3112, IRS e-file Application and Participation

  8. A participant who is suspended has the right to an administrative review of the suspension. The participant should send the request for administrative review to the Office of Appeals to the address located on the letter.

  9. ERO Administrative reviews go to Appeals if the office that imposed the sanction affirms its own decision. See Publication 3112, page 28.

  10. IRS counsels suspended participants about the requirements for reinstatement into the electronic filing programs.

    Note:

    This section only covered general information. For specific details and complete guidance about suspension from electronic filing, refer to Revenue Procedure 2007-40, Authorized IRS e-file Provider Responsibilities and any other applicable revenue procedures for the electronic filing program used. Also review Publication 3112, IRS e-file Application and Participation.

3.42.4.13  (01-01-2010)
e-file Requirements for Penalties and Waiver Procedures

  1. This section provides a brief description of applicable IRS Treasury Regulations and penalties regarding IRS e-file and provides procedures for granting or denying waiver requests.

3.42.4.13.1  (01-01-2009)
Penalties

  1. Penalties are assessed as specified in the Treasury Regulations.

  2. Rules for assessment of penalties for disclosure or use of information by preparers of the returns are specified in Treasury Regulations 301.7216-1, -2, and -3.

  3. Civil penalties are detailed in IRC Section 6713 and IRC Section 7216.

  4. A definition of who is a preparer (and therefore subject to most preparer penalties) is given in the Treasury Regulation 301.7701-15. However, for purposes of penalties under IRC Sections 6713 and 7216, the definition of preparer provided by Treasury Regulation 301.7216-1(b)(2) applies.

3.42.4.13.2  (01-01-2010)
Penalty Policy Statement 20–1

  1. The Service will design, administer, and evaluate penalty programs on the basis of whether they most efficiently encourage compliant conduct. The Policy Statement can be found in IRM 1.2.20.1.1, Policy Statement 20-1 (Formerly P–1–18).

  2. In accordance with this Policy Statement, the IRS administers a penalty system that is designed to:

    1. Ensure consistency

    2. Ensure accuracy of results in light of the facts and the law

    3. Provide methods for the Taxpayer to have his or her interests heard and considered

    4. Require impartiality and a commitment to achieving the correct decision

    5. Allow for prompt reversal of initial determinations when sufficient information has been presented to indicate that the penalty is not appropriate

    6. Ensure that penalties are used for their proper purpose and not as bargaining points in the development or processing of cases

  3. Penalties support the Service's mission only if they enhance voluntary compliance. This is accomplished by:

    1. Helping Taxpayers understand that compliant conduct is appropriate and that non-compliant conduct is not

    2. Deterring non-compliance by imposing costs on it

    3. Establishing the fairness of the tax system by justly penalizing the non-compliant Taxpayer

  4. The Service maintains an ongoing effort to develop, monitor, and revise programs designed to assist Taxpayers in complying with legal requirements and, thus, in avoiding penalties.

  5. To ensure consistency, the Service prescribes and uses a single set of guidelines set out within IRM 20.1, Penalty Handbook, which will be followed by all operational and processing functions.

  6. Prior to implementation, changes to the Penalty Handbook must be reviewed for consistency with Service policy and approved by the Office of Penalty Administration.

  7. The Service collects statistical and demographic information to evaluate penalties and penalty administration and how they relate to the goal of voluntary compliance.

  8. The Service continually evaluates the impact of the penalty program on compliance and recommends changes when the statutes or administration of penalties are not effectively promoting voluntary compliance.

  9. For additional information review the applicable program publications.


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