The Filing Process: e-file, Records and Data Security
How returns reach the IRS through authorized e-file providers: the preparer e-file mandate and Form 8948, the e-file application and EFIN, ERO duties, signature methods and Forms 8879 and 8453, rejected returns, infraction levels and sanctions, advertising rules, record retention and data security under the FTC Safeguards Rule. The sources are Pub. 1345 (Rev. 12-2025) and Pub. 3112 (Rev. 11-2025).
Filing Process·5 min read·7 sections
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Must-know for the exam
✓A preparer who reasonably expects to file 11 or more individual or trust returns in a calendar year must e-file them; firm members' counts are aggregated (IRC 6011(e)(3); Treas. Reg. 301.6011-7).
✓A client may choose paper: keep her signed choice statement and attach Form 8948 to the paper return (Treas. Reg. 301.6011-7(a)(4); Rev. Proc. 2011-25).
✓Firms apply through the e-Services e-file application for an EFIN; principals must be 18 or older and US citizens or permanent residents (Pub. 3112 (Rev. 11-2025)).
✓Form 8879 stays with the ERO for 3 years from the later of the due date or IRS receipt and is sent only on request (Pub. 1345 (Rev. 12-2025)).
✓A new signature is needed if data change by more than $50 of total income or AGI, or $14 of tax, withholding, refund or balance due (Pub. 1345 (Rev. 12-2025)).
✓Tell the taxpayer of an unfixable reject within 24 hours; a timely return resubmitted electronically by the fifth calendar day after the due date is timely (Pub. 1345 (Rev. 12-2025)).
✓A paper return after a reject is timely if filed by the later of the due date or 10 calendar days after the IRS reject notice (Pub. 1345 (Rev. 12-2025)).
✓Infractions: Level One reprimand; Level Two 1- or 2-year suspension; Level Three 2-year suspension or expulsion; review requests within 30 days (Pub. 3112 (Rev. 11-2025)).
✓Preparers must keep a written information security plan and use multi-factor authentication for anyone accessing customer data (16 CFR 314.4; Pub. 4557).
✓Security incidents must be reported to the IRS no later than the next business day after confirmation, through the stakeholder liaison (Pub. 1345 (Rev. 12-2025)).
▸On this page · 7 sections
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Traps that cost marks
→Using the 10-return information return threshold.
→Filing on paper without Form 8948.
→Confusing the EFIN with the PTIN or CAF number.
→Confusing ERO, transmitter and software developer roles.
→Mailing Form 8879 to the IRS or using the employment tax 4-year period.
→Confusing Form 8453 with Form 8879.
→Assuming a rejection after the due date makes the return late.
→Treating all infractions alike.
Why it matters on the exam
Part 3 Domain 4 carries 14 scored questions on the mechanics of e-file. Most are recall from Pub. 1345 and Pub. 3112: thresholds, time limits and who may do what. A few are short date calculations after a rejected return.
Refunds by direct deposit may go only to accounts in the taxpayer's name, never to the preparer's account or a credit card (Pub. 1345 (Rev. 12-2025)).
Becoming and staying an e-file provider
•Mandate: 11 or more individual or trust returns expected in a year makes a specified tax return preparer, who must e-file.
•Application: online in e-Services, naming principals and responsible officials, who pass a suitability check. The IRS then issues an EFIN; individual preparers also need a PTIN.
•Fingerprints: required unless the person shows status as an attorney, CPA, enrolled agent, officer of a publicly held corporation or bonded banking official. A licensed public accountant is fingerprinted.
•Updates: changes in principals, address or structure must be made to the application within 30 days.
•Roles: the ERO originates the submission and obtains signatures; transmitters and software developers are separate provider roles.
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