These days, becoming a tax preparer is usually synonymous with e-filing. In fact, if you file 11 or more returns—or expect to—the IRS wants you to e-file. Becoming an e-filer takes three steps:
- Get an IRS e-Services Account for each principal or responsible person in your firm (see Pub 3112, pp. 8–9, if you need definitions).
- Apply to become an Authorized IRS e-File Provider, also known as an Electronic Return Originator (ERO). The application is done online in your e-Services Account.
- Pass an IRS suitability check. The IRS looks into the backgrounds of the applicant and each principal or responsible person on the application. It may check criminal records, credit reports, tax filing compliance, as well as prior e-filing compliance.
This process can take up to two months, and applying to become an ERO (step 2) takes most of that time, 4 to 6 weeks on average. So it’s best to not procrastinate until late in the calendar year, because if the IRS gets a backlog of applications at that time of year, you could face a delay in being able to e-file live returns.
Once approved, your firm will receive an Electronic Filing Identification Number, or EFIN. This number identifies the firm as the sender of any e-filed returns.
If you don’t already have an EFIN when you purchase Drake Tax, you’ll be assigned a temporary EFIN, which you can use to test e-filing. You’ll also use the temporary EFIN as your username when signing into the Drake Support website and using other Drake web-based tools. Remember, before you can e-file actual customer returns, you must apply for an EFIN with the IRS.
When you receive your EFIN, provide your E-File Application Summary with a status of “Completed” to Drake Software. Watch this video for important information.
You may send the EFIN document by:
You will receive a confirmation email once your document has been accepted and uploaded on your account. Please allow 4 hours for processing.
E-filing State Returns
Usually, getting an EFIN also enables you to e-file state returns, but you should know that some states have different or additional e-file requirements. For example, some states “encourage” e-filing much more forcefully than other states, and may even go so far to penalize preparers who send a paper return without a good reason.
A handful of states also require preparer registration at the state level: California, Maryland, New York, Oregon, and Virginia. So if you’re a preparer in one of these states, see your state’s tax department website for registration details. (A registration is not required to prepare a return for one of these states if your business is not located in the state.)