IRS e-file providers. Providers are firms and organizations that develop software, originate and/or transmit electronic returns to the IRS, and provide services to a multitude of taxpayer clients. The roles and responsibilities of Providers vary according to the e-file activities that firms conduct. Each Provider Option entails a different role and may have different responsibilities that relate specifically to the e-file activity of the firm. Some Providers may have more than one e-file business activity. For example, an Electronic Return Originator (ERO) may also be a Transmitter. Providers must adhere to all IRS e-file rules and requirements applicable to their multiple e-file roles. The following details the roles and responsibilities of each Provider Option.
Electronic Return Originator (ERO). The ERO is the Provider who originates the electronic submission of a return to the IRS. The ERO is usually the first point of contact for most taxpayers filing a return using IRS e-file.
RESPONSIBILITIES: Origination of an Electronic Return. Although an ERO may also engage in return preparation, that activity is separate and distinct from the origination of the electronic submission of the return to the IRS. An ERO originates the electronic submission of a return after the taxpayer authorizes the filing of the return via IRS e-file. An ERO must originate the electronic submission of only returns that the ERO either prepared or collected from a taxpayer. An ERO originates the electronic submission by any one of the following:
In originating the electronic submission of a return, the ERO has a variety of responsibilities including, but not limited to:
Software Developer. A Software Developer creates software that formats electronic return information according to IRS e-file specifications and/or transmits electronic return information directly to the IRS. Software Developers must pass the Assurance Testing System (ATS) which is an IRS test environment system for electronic forms. If a Software Developer performs the function of any provider, in addition to software development, suitability checks apply.
RESPONSIBILITIES: A Software Developer has a variety of responsibilities that include, but are not limited to:
Transmitter. A Transmitter sends the electronic return data directly to the IRS. EROs may apply to be Transmitters and transmit return data themselves, or they may contract with an accepted third-party Transmitter to transmit the data.
RESPONSIBILITIES: A Provider participating in MeF as a Transmitter has a variety of responsibilities that include, but are not limited to:
Online Provider. An Online Provider transmits business income tax return information prepared by a taxpayer using commercially purchased software or software provided by an Internet site.
RESPONSIBILITIES: An Online Provider has a variety of responsibilities that include, but are not limited to:
Intermediate Service Provider (ISP). An ISP assists with processing return information between an ERO, or the taxpayer in the case of Online Filer, and a Transmitter.
RESPONSIBILITIES: An ISP has a variety of responsibilities that include, but are not limited to:
Reporting Agent. A Reporting Agent originates the electronic submission of certain returns for its clients, and/or transmits the returns to the IRS. A Reporting Agent must be an accounting service, franchiser, bank, or other entity that complies with Rev. Proc. 2012-32, IRB 2012-34, and is authorized to perform one or more of the acts listed in Rev. Proc. 2012-32 on behalf of a taxpayer. Reporting Agents must submit Form 8655, Reporting Agent Authorization to the IRS prior to updating or submitting an IRS e-file application.
Large Taxpayer. A Large Taxpayer is also a Provider Option on the IRS e-file Application but it is not a Provider. The creation of an IRS e-file Application for Large Taxpayers is different from the Authorized IRS e-file Providers Application. For purposes of electronic filing, the IRS defines a Large Taxpayer as a business or other entity (excluding partnerships) with assets of $10 million or more, or a partnership with more than 100 partners (asset criteria does not apply to partnerships), which originates the electronic submission of its own return(s).