The EFIN Application: Your License to E-File

Why This Matters for the Exam

The EFIN application process is testable because it involves multi-step compliance (suitability check, fingerprints, timing). Expect questions about who is exempt from fingerprints, how long the process takes, and what the IRS reviews during the suitability check.

Understanding EFIN vs. PTIN is also critical—many students confuse the two.

EFIN vs. PTIN: The Critical Distinction

PTIN (Preparer Tax Identification Number)

• Who needs it? Any paid tax return preparer.
• Purpose: Identifies the individual preparer on tax returns.
• How to get it? Apply online via IRS.gov. Approved immediately.
• Cost: $19.75/year (as of Tax Year 2024).
• Renewal: Annual renewal required.

EFIN (Electronic Filing Identification Number)

• Who needs it? Any firm or individual who wants to e-file returns.
• Purpose: Identifies the firm/location authorized to transmit returns.
• How to get it? Apply via IRS e-Services. Requires suitability check.
• Cost: Free.
• Renewal: One-time application (unless revoked).

Key Difference: PTIN = preparer identification. EFIN = firm authorization to transmit.

A solo practitioner needs both: PTIN to prepare returns, EFIN to e-file them. A large firm might have one EFIN for the office and multiple PTINs for individual preparers.

The EFIN Application Process: Step-by-Step

Step 1: Create an IRS e-Services Account

Before applying for an EFIN, you must create an account on the IRS e-Services portal. This requires:

• A valid PTIN (you must be a registered preparer).
• Business information (EIN, address, business structure).
• Personal information for the Responsible Official (the person who will manage the EFIN).

Step 2: Submit the EFIN Application (Form 8633)

The application (Form 8633) asks for:

• Business Details: Legal name, EIN, address, phone.
• Responsible Official: Name, SSN, PTIN, background information.
• Principals/Partners: Names and SSNs of all owners or partners (if applicable).
• Prior IRS Issues: Any history of penalties, suspensions, or investigations.

Critical Rule: The Responsible Official must have signature authority for the firm and will be held accountable for compliance.

Step 3: Suitability Check

The IRS conducts a comprehensive background review of the Responsible Official and all principals. This includes:

A. Tax Compliance Check

• Are you current on all federal tax filings (personal and business)?
• Do you have any outstanding tax liabilities?

B. Criminal Background Check

• Have you been convicted of any felonies (especially fraud, identity theft, or tax crimes)?
• Are there pending criminal charges?

C. Credit Check

• Do you have significant delinquent debts?
• Have you filed for bankruptcy recently?

D. Prior E-File History

• Have you had an EFIN suspended or revoked in the past?
• Have you been subject to IRS penalties for e-file violations?

Why It Matters: The IRS views e-file providers as trusted partners. Applicants with serious compliance issues (tax evasion, identity theft convictions) will be denied.

Step 4: Fingerprinting (If Required)

Fingerprints are required unless you fall into one of these exempt categories:

Exempt from Fingerprints:

• Attorneys (members of a state bar).
• Certified Public Accountants (CPAs) (licensed by a state board).
• Enrolled Agents (EAs) (enrolled to practice before the IRS).
• Existing EFIN Holders (if you already have an EFIN for another location, you may be exempt for additional locations).

Not Exempt:

• Unlicensed preparers (e.g., AFSP participants).
• Preparers with credentials from other countries (unless recognized by a US state).

How to Submit Fingerprints:

• Schedule an appointment with an IRS-authorized fingerprinting vendor (free of charge).
• The vendor electronically submits your fingerprints to the IRS.

Timing: Fingerprints must be submitted within 30 days of receiving the fingerprint request from the IRS, or your application will be denied.

Step 5: Wait for Approval

The IRS typically takes 45 days to review and approve an EFIN application. This timeline assumes:

• All required information is submitted.
• Fingerprints (if required) are submitted on time.
• No red flags appear during the suitability check.

Denials and Appeals: If your application is denied, you'll receive a letter explaining the reason (e.g., "outstanding tax debt," "prior suspension"). You can:

• Correct the issue (e.g., pay off tax debt) and reapply.
• Request reconsideration if you believe the denial was in error.

EFIN Application Timeline

On the Exam

Expect 2-3 questions on EFINs, typically:

1. Exemption Questions: "Who is exempt from submitting fingerprints for an EFIN?"
2. Timeline Questions: "How long does the EFIN application process generally take?"
3. PTIN vs. EFIN: "What is the difference between a PTIN and an EFIN?"

Key takeaway: Attorneys, CPAs, and EAs are exempt from fingerprints. The process takes approximately 45 days.