EFIN number database

[superman]

Is there such a thing as an EFIN number database? I think I know a preparer that is working out of their house without a EFIN but I cannot prove it. I would love to look up this person just as peace of mind.

Thanks
Superman

[taxtimeagain]

You can do a search for providers on irs.gov http://www.irs.gov/uac/Authorized-IR...-Professionals

[BP.]

I know a preparer that is working out of their house without a EFIN

Why would this be wrong? PTIN required if getting paid.

EFIN required if a "specified tax return preparer." How would you know if they meet the definition?

[taxea]

PTIN required for you to get paid. EFIN required to file electronically. If the preparer's returns are all manually filed only the PTIN is required. PTIN's are accessable from the IRS with a FOIA, EFIN's at the listed address above, however, don't count on it being there. My info is not listed when I quiry using the 5 digit zip code of preparer and I definately have an EFIN. Using 3 digits gives a broader search....like nearly the entire state, in my case, because this state only has two 3 digit zip code prefaces.

[Koss]

E-file Mandate

Superman wrote:

I know a preparer that is working out of their house without a EFIN...

BP wrote:

Why would this be wrong?

If they are preparing more than ten returns per year, then they are required to offer electronic filing to all clients.

If they don't have an EFIN, how are they offering e-filing to their clients?

I see three possibilities:

(1) They are not offering e-filing. Very unlikely. Clients don't want to wait for their refund. But if this is the case, then they are in violation of the e-file rules if they do more than ten returns per year.

(2) They have an agreement with another independent preparer, who has an EFIN, and who uses the same software. The other guy is filing the returns electronically. I think this is unlikely, but possible. I'm not sure whether IRS e-file regs explicitly prohibit this. From a technical and procedural standpoint, it is still possible to configure professional software so that the name of the preparer, and the preparer's firm, are different from the ERO. In other words, one firm can be the ERO, while the preparer who signs the return works for a different firm (which may well be a sole prop).

(3) The tax pro may be using consumer software, such as TurboTax. They may be signing the paper copy of the return that they give the client, with their PTIN. But when they file the return electronically through TurboTax, there is no way to enter a PTIN. DIY software does not support those fields. This means that the tax pro is not signing the return that is filed with the IRS. That's a serious violation. The IRS is trying to crack down on this practice. But right now they are too busy trying to figure out how to untangle the PTIN system from the RTRP machine...

BMK

[BP.]

If they are preparing more than ten returns per year, then they are required to offer electronic filing to all clients.

That's not the requirement, hence my question. The e-file mandate is for those who file 11 or more returns. "Filing" has been established as different than "preparing" returns.

IRS explains the mandate here, and discusses their definition of "filing" in #7:

http://www.irs.gov/Tax-Professionals/Frequently-Asked-Questions:-E-file-Requirements-for-Specified-Tax-Return-Preparers-(sometimes-referred-to-as-the-e-file-mandate)

If you have the 2012 What's New TTB book, this is discussed on p. 5-6 and 5-7.

[Gene V]

(2) They have an agreement with another independent preparer, who has an EFIN, and who uses the same software. The other guy is filing the returns electronically. I think this is unlikely, but possible. I'm not sure whether IRS e-file regs explicitly prohibit this. From a technical and procedural standpoint, it is still possible to configure professional software so that the name of the preparer, and the preparer's firm, are different from the ERO. In other words, one firm can be the ERO, while the preparer who signs the return works for a different firm (which may well be a sole prop).

(BMK

My software has just that--Alternate Paid Preparer section to EF for another firm.

[Koss]

E-file Requirements

BP wrote:

"Filing" has been established as different than "preparing" returns.

You are correct that there is a technical distinction between preparing and filing. But in practice, I'm not convinced that the distinction is important or meaningful.

I stand by my assertion that most individual taxpayers want electronic filing, even if they have a small refund or a balance due. They certainly don't want to mail it themselves, and worry about the possible need for additional postage. But if the preparer mails it for the taxpayer, then the preparer is considered to have filed the return.

Furthermore, the e-file rules appear to require Form 8948 for those clients who choose not to file electronically.

An independent tax pro working out of his or her home is not going to be very successful, and is not going to have many clients, if they don't offer electronic filing somehow.

So they either need an EFIN or a relationship with a tax pro who has one. They can't use off-the-shelf software, as the IRS calls it, and file returns electronically without entering their PTIN and other identifying information. And I'm pretty sure TurboTax doesn't support Form 8948. Think about it: the form is only used when a return is prepared by a tax pro, and not filed electronically. Because TurboTax does not support data entry in the preparer identification fields, and it is not designed for tax pros, the user probably cannot select Form 8948.

I will concede that there might be a few independent tax pros out there who really don't need an EFIN, OR a relationship with a tax pro who has an EFIN. For example, maybe some semi-retired guy who only does 25 returns a year, for acquaintances, extended family members, a few elderly clients for whom he has been doing their returns for, say 15 years or more. Maybe these folks really don't care if the return is filed electronically. If they truly opt out, and he completes Form 8948 for each return, then all those returns could be filed by mail.

And if he fills out Form 8948 by hand, or using the PDF from the IRS website, then he might even get away with using TurboTax instead of buying professional software.

That would be a violation of the software license. But technically he would be in compliance with IRS regulations.

That's also the kind of preparer who would find it very burdensome to pass a test, and take 15 hours of CE each year.

BMK

[BP.]

there is a technical distinction between preparing and filing. But in practice, I'm not convinced that the distinction is important

Look, merits and benefits of e-file aside, and who can pass which tests, and how successful any given tax practice is likely to be, and technical v. practical or whatever, the fact is that the IRS explains in their e-file mandate FAQ page that only "specified tax return preparers" are bound by the mandate, and then it takes the time to define a "specified tax return preparer." In FAQ #6, the language tells us to exclude from the return count any returns that the taxpayer mails themselves.

Technicalities reign in this industry, and the only point here is that the word "prepare" isn't a substitute for the word "file" in the context of the e-file mandate.

To respond to the OP, one might not know if the preparer is a "specifed" preparer, and therefore might not be doing anything wrong in not having an EFIN. That's all.

Of course, we want EFINs! Of course, we want to be successful and offer e-filing because that's what taxpayers want! But in nailing down the actual language used in the rule here, that's not really relevant. Whether one feels the distinction is important, the IRS has created and defined the distinctions.