This section discusses monitoring of Authorized IRS e-file Providers.

Monitoring of authorized IRS e-file providers is conducted by IRS e-help and Small Business/Self-Employed (SB/SE) Examination to ensure compliance with Rev. Proc. 2007–40, IRB 2007-26 1488, Pub 3112, IRS e-file Application and Participation, and Pub 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns, that govern IRS e-file.

Noncompliance issues discovered outside of IRS e-file should not be addressed during the e-file monitoring visit. However, prior to closing the case, the e-file monitoring coordinator (EMC) must document and retain in the case file the reason a referral is warranted and timely complete a referral to the appropriate function:

Visit the following websites for a list of coordinators:

All referrals to the RPC, CI, or the EITC coordinator must be reported timely to SB/SE Examination Headquarters e-file Exam Policy program analyst (herein after referenced as Exam HQ e-file analyst) via the "E-file Compliance Monitoring Report." See Exhibit 4.21.1-17.

IRS e-help is responsible for processing and accepting e-file applications from all applicants to participate in IRS e-file. In addition, IRS e-help performs suitability checks on all applicants and providers to ensure the provider meets the requirements to participate in IRS e-file. IRS e-help also monitors the testing of a transmitter’s software and documents and the quality of the transmission of the e-file returns. They will contact the provider directly to correct problems identified in the transmission of returns.

The area office EMC is responsible for all field aspects of monitoring providers. Monitoring is generally accomplished through visits to the provider’s establishments either by the EMC and/or e-file Monitor(s) trained by the EMC. The monitor(s) or the EMC monitors the operation of a provider and advises providers of violations identified at the locations.

Violation(s) may result in a warning, a written reprimand, suspension or expulsion from participation in IRS e-file, depending on the severity of the infraction. Referral and follow-up visits are used to investigate allegations, complaints, and warnings against Authorized IRS e-file Providers. Referrals and follow-ups visits may be mandatory visits depending on the severity of the issue and the facts determined. The decision is made by the EMC after reviewing the information. Random and targeted visits are used to determine general compliance within IRS e-file. See IRM 4.21.1.9, Types of Visits and Workload, for a description of each type.

To sanction a provider as a result of monitoring, the EMC faxes a completed e-file Monitoring Sanction Request, Exhibit 4.21.1-11, to IRS e-help with a copy of the signed sanction letter. See Exhibit 4.21.1-6, Sample Letter - Suspension, that was mailed to the provider. IRS e-help staff will update the Third Party Data Store (TPDS) appropriately to place the provider in non-compliance (field meeting) status. Visit http://se.ds.irsnet.gov/sites/WI/ETARC/S/TP/ETA/EMC/default.aspx for fax number.

For definitions of Electronic Return Originator (ERO), Intermediate Service Provider, Software Developer, Transmitter, and Reporting Agent, see Rev. Proc. 2007–40, section 3.

Participants in IRS e-file are referred to as Authorized IRS e-file Providers (providers). They offer clients a special service which produces higher quality returns. Benefits include an IRS acknowledgement of receipt of the electronic return. This acknowledgement does not occur with paper returns. Electronic returns also go through validation and are rejected for certain kinds of inaccuracies. The accuracy rate of e-file returns is greater than that of paper returns.

Applicants select the provider options that are best for them. They may select one option, or a combination of the following provider options:

Electronic Return Originator (ERO) - An ERO originates the electronic submission of a tax return through IRS e-file after the taxpayer authorizes the electronic filing of the return.

Intermediate Service Provider (ISP) - An ISP receives tax returns from EROs (or from a taxpayer or tax exempt organization that files electronically using a personal computer, modem or the Internet, and commercial tax preparation software), processes the return information, and either forwards the information to a transmitter, or sends the information back to the ERO (or to the taxpayer or exempt organization).

Transmitter - A transmitter will send the electronic return data directly to the IRS. EROs can become transmitters and transmit return data themselves, or they may contract with accepted third-party transmitters that will transmit the data for them. A transmitter must have software and computers that allow it to interface with the IRS.

Software Developer - A software developer develops software for the following purposes:

Online Filing Provider - An online filing provider allows taxpayers to self-prepare returns by entering return data directly into commercially available software, software downloaded from an Internet site and prepared off-line, or through an online Internet site.

The categories used to describe providers are not mutually exclusive. For example, an ERO can simultaneously be a transmitter, a software developer, or an ISP depending on the function being performed.

EMCs will receive external referrals by telephone from other providers, tax professionals, and taxpayers as call assistors provide the name and telephone number of the appropriate area EMC to callers wanting to report potential violation of e-file rules.

EMCs will receive internal referrals from IRS employees who believe a provider is violating IRS e-file rules. The referring employee will do the following:

Monitoring visits include the following stages:

Monitors should receive case files via Form 3210, Document Transmittal, from the EMC. These cases will not be established on the Audit Information Management System (AIMS). They must be established on Examination Returns Control System (ERCS) or controlled manually by the EMC. Monitors should review the case file and ensure the following information is included:

Visits should be scheduled in the following order:

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In addition, all providers issued written warnings or written reprimands are subject to follow up monitoring visits in the subsequent tax return filing season to ensure corrective actions have been taken.

Documentation is required to support referrals from internal and external sources, including the receipt and dispositions of referrals and the actions taken based on these referrals.

The number of provider monitoring visits for an area is determined based on the total number of providers within a given geographical area. The Exam HQ e-file analyst will advise the area EMCs of the number of visits their area should conduct annually. The visits will be one of the four types listed in priority order below:

Referrals and follow-up visits are used to investigate allegations, complaints, and warnings against providers. Referrals and follow-ups may be mandatory depending on the severity of the issue. The decision is made by the EMC after reviewing the information.

Targeted and random visits are used to determine general compliance with IRS e-file. Targeted and random visits are not mandatory and may be scheduled appointments. The EMC or monitor(s) will take appropriate measures to ensure compliance with IRS e-file requirements by conducting a visit and by completing the E-file Monitoring Visit Check Sheet. See Exhibit 4.21.1-8

All referrals must be reviewed and evaluated by the EMC upon receipt. If the referral clearly suggests noncompliance, it must be placed in priority status and becomes a mandatory visit. See IRM 4.21.1.9 for a definition of types of visits. The EMC prepares the case file and forwards it to the monitor using Form 3210, Document Transmittal, for a visit within five working days upon receipt of the case. If the monitor cannot make the visit within five working days, the area EMC must be contacted.

Referrals include, but are not limited to:

A follow-up visit originates from a previous year’s visit that involved an identified violation. If the follow-up visit is based upon a written reprimand, the EMC determines if a visit is necessary to ensure corrective action has taken place. See Exhibit 4.21.1-2, Sample Letter - Warning, or Exhibit 4.21.1-4, Sample Letter - Written Reprimand.

A targeted visit is based upon reject rates provided in IRM 4.21.1.8, Risk-Based Selection Criteria, due to error codes that indicate e-file compliance issues may be present in a particular provider's e-file practice. The Exam HQ e-file analyst will provide a list of e-file providers that meet this criteria to the EMC. To select targeted visits, the EMC should select e-file providers with the highest reject rates from the list provided by the Exam HQ e-file analyst for the geographic location needed.

A random visit is a tool used to conduct monitoring visits based upon a non-discriminatory sampling of active providers. Random monitoring visits are conducted by area offices and should be made by appointment. Random visits are determined based on a sample selected from a central database of active providers in the monitor’s geographic area. The Exam HQ e-file analyst will provide an inventory of random visits if requested. See IRM 4.21.1.9 (3).

Referral and Follow-up Visits - Unannounced visits are recommended. Immediately upon arrival, the monitor should advise the provider of the purpose of the visit and the approximate time needed to perform the monitoring visit. The monitor should request the necessary records to conduct the visit. Monitors should be as unobtrusive to the provider’s operation as possible.

Targeted and Random Visits - Targeted visits and random monitoring visits should be made by appointment. Upon receipt of the provider case file, it is recommended that the monitor contact the provider by telephone to schedule an initial appointment and advise the provider of the purpose of the visit and the approximate time needed to perform the monitoring visit. The monitor should send an e-file Monitoring Appointment Letter, Exhibit 4.21.1-18, to the e-file provider confirming the appointment and identifying the records that should be made available for review during the e-file monitoring visit. Monitors should be as unobtrusive to the provider's operations as possible.

All visits should be conducted in a professional and courteous manner. It is recommended that the monitor conduct the interview prior to reviewing the provider’s records. If the team approach is used, one monitor may interview the provider while the other monitor reviews the records. Interviews should only be conducted with an authorized individual identified on Form 8633, Application to Participate in IRS e-file Program, information which could include a principal, responsible official, primary contact, or alternative contact representative.

Monitors should use Exhibit 4.21.1-8, E-file Monitoring Visit Check Sheet, to conduct the interview with the provider.

The promotion of goodwill and open communication between the IRS and providers is important. Provider visitations promote goodwill and open communication between the IRS and providers. The visitations are also a means of communicating fraud awareness to providers, detecting fraud, and ensuring that providers are in full compliance with Rev. Proc. 2007–40, Pub 3112, and Pub 1345.

The monitor or the EMC reviews the operations of a provider, which may include its satellite offices, temporary offices, and seasonal offices and advises the provider of any violations identified at those locations. Monitoring includes, but is not limited to:

Violation(s) may result in a warning letter, written reprimand, suspension, or expulsion of the provider depending on the severity of the infraction, and/or penalties under IRC 6695 and/or IRC 6713.

Prior to any visitation, the EMC must coordinate with other functions to determine:

A team from the area office may perform the compliance monitoring visits. A team approach is preferred if resources are available. A team consists of two IRS representatives. At least one member of each team must represent Examination.

Team members will be trained by the EMC to perform targeted visits, random visits, mandatory visits, identify violations, to issue written warnings and prepare written reprimands, summarize findings, and make referrals. Additional training will be given to team members as rules, tax law, and procedures are amended.

Team assignments will be made by the EMC based upon the geographic location of the providers, staffing, and the required number of visits to be performed.

All monitors should advise the provider of the purpose of the visit and the approximate length of time needed immediately upon arrival. Monitors should be as unobtrusive to the provider's operations as possible. Monitors should always be professional and courteous when performing visitations.

The EMC should gather all available reports for supporting documentation. This includes:

The monitoring team should complete an E-file Monitoring Visit Check Sheet for each visitation.

The following are some items to consider when conducting visitations:

A provider that does not cooperate with monitoring efforts must be advised that such action may result in immediate suspension from participating in IRS e-file. The facts regarding the provider’s failure to cooperate must be documented on the Form 9984, Examining Officer’s Activity Record, and the monitor should initiate immediate suspension procedures. See IRM 4.21.1.25.7.

The area office monitors must close the e-file monitoring visit case file to their group manager who will then close it to the EMC using Form 3210 according to the due dates prescribed by the area office.

If the monitor visits a physical location for an Authorized IRS e-file Provider and finds that the provider is no longer operating at that address:

Competitors and taxpayers often call the EMCs or Customer Service call sites to report advertising irregularities.

The EMC and/or monitor reviews questionable advertising brought to their attention from internal and external referrals to ensure compliance.

Advertisements that the e-file monitor determines are not in compliance with the requirement of Rev. Proc. 2007–40, Pub 3112, and Pub 1345 must be brought to the attention of the provider to resolve the problem. If the provider does not take any corrective action, issue a warning letter specifically outlining the corrective action necessary to resolve the cited deviation, including a specified date for compliance. If the provider declines to take action to correct an advertisement or if the advertisement is not discontinued, pursue sanctions in accordance with the level of infractions.

A provider must not use "Internal Revenue Service" or "IRS" within a firm’s name, or within a firm's name for advertising purposes.

In situations where a provider does not comply with e-file rules, the monitor is responsible to initiate a warning, or draft the appropriate sanction letter and notify the EMC in the area where the provider has its main office. Reasons for suspensions may also be the same reasons for denials of participation, included in Pub 3112.

The IRS can immediately suspend, without notice, a provider from participation in IRS e-file. However, in most circumstances, a suspension from participation in IRS e-file is effective as of the date stated in the letter informing the provider of the suspension.

If a provider is being investigated by CI, the EMC should contact CI and discuss sanctions. If CI agrees the provider can be sanctioned, but advises the Scheme Development Center (SDC) not to initiate sanctions, the EMC can use another documented infraction to sanction the provider.

If the area office is notified of, or finds during a monitoring visitation, that a provider is not complying with IRS e-file rules, the area will perform the following:

The EMC of the controlling area will determine the severity of the reported violations and will schedule a monitoring visit if one has not been conducted, or issue the appropriate sanctions letter.

The monitor(s) may sign warning letters issued during a site visitation. In addition, a warning letter signed by the EMC must be issued to the controlling office. For the purpose of this section, a designated individual may represent the EMC.

The following techniques may be used by the monitoring team to identify potential violations within IRS e-file. The list is not all inclusive. The monitoring team may develop its own techniques to identify violations.

Tax Returns - Confirm that the provider provided a copy of the completed tax return to the taxpayer. Select a sample of tax returns for review and complete the "File Sample Reviewed" form. Based upon the analysis of the returns, monitors may identify the preparation of questionable tax returns. If this occurs, the monitor should make a referral to the RPC and identify the issues in question.

IRS e-file Application - To become an authorized IRS e-file provider, an applicant must complete Form 8633, Application to Participate in IRS e-file Program. Any changes to the application information must be submitted to the IRS within thirty (30) calendar days. Once approved to participate in IRS e-file, the provider will receive an "acceptance letter" containing his/her EFIN. Review the ERO's application information on EUP to ensure that the provider’s information is correct.

Electronic Signatures - Beginning with the 2008 filing season, providers can e-file individual returns only if taxpayer signs the return electronically using one of two methods: either a self-selected PIN or a practitioner PIN. Both methods allow taxpayers to electronically sign e-file returns using a five-digit PIN. A self-select PIN is used when a taxpayer enters either the prior year's adjusted gross income (AGI) or the prior year's PIN and is paperless if the taxpayer enters a PIN. PINs require the use of Form 8879, IRS e-file Signature Authorization, which must be retained by the provider.

Form 8879, IRS e-file Signature Authorization - If both taxpayers on a joint return are present at the time of tax return preparation, both taxpayers may choose to utilize the self-selected PIN option of signing the tax return. If one or both of the taxpayers on a joint return are not available to select a PIN, and if the provider participates in the preparer PIN method, the provider may select the PIN. In order for the provider to select the PIN, the provider must have a completed and signed Authorization/Authentication Form before the tax return is transmitted.

Acknowledgement Report - An acknowledgement report is generated electronically by the IRS to a transmitter indicating receipt of all transmissions. An acknowledgement report indicates which returns are accepted or rejected. It also indicates if the taxpayer(s) PIN was accepted by IRS. The listing identifies the source of processing problems using a system of error reject codes.

Tax Return Electronic Portion - A review of the acknowledgement listing must be made to identify possible e-file compliance issues relating to the transmission of the electronic tax return.

Refund Anticipation Loans/Fees - A refund anticipation loan (RAL) is money borrowed by a taxpayer based on the anticipated tax refund. The taxpayer may need access to the tax refund quicker than the IRS can release the funds. Since the ERO offers his/her client a RAL based on the federal tax return, the taxpayer gains access to the money faster.

Refund Anticipation Loan Advance - Is money advanced to taxpayers based on their anticipated tax refund? If taxpayers are approved for a "RAL Advance," they can receive part of their RAL proceeds the same day. Usually, the "RAL Advance" will be disbursed using the same disbursement method as the RAL proceeds.

Refund Transfer - By offering a refund transfer bank product, the ERO can have all preparation fees deducted from the taxpayer’s refund. The taxpayer may not have the funds to pay up front to have the tax return prepared. The benefits to ERO's clients are no out-of -pocket costs.

Stockpiling - Tax returns must be transmitted within three calendar days of completion.

Fee Schedules - Treasury Department Circular 230, Regulations Governing Practice Before the Internal Revenue Service, states, "that it is beyond the scope of their authority to receive checks in payment of any refund of Internal Revenue taxes, penalties, or interest," nor can the preparer charge an "unconscionable fee in connection with any matter before the Internal Revenue Service." No fee may be charged for direct deposit. Ask to review the office fee schedule. Confirm that the fees are neither unconscionable nor negotiated based on the amount of the refund.

Security - Inspect the office for tax returns lying around where the returns might be in view of other taxpayers. Also, inspect the office to ensure the EFIN or PTINs are not posted in large numbers. In addition, determine the answers to the following questions:

Physical Checks -

Advertising - Refer to Pub 3112, IRS e-file Application and Participation, Pub 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns.

Forms W-2s, W-2G and 1099-R - Returns must not be electronically filed prior to the provider’s receipt of the related Form W-2, Wage and Tax Statement, Form W-2G, Certain Gambling Winnings, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

Knowledge - The provider should be familiar with Pub 3112, Pub 1345, and Rev. Proc. 2007–40. Inquire whether the provider has attended any tax forums or local seminars sponsored by the local Stakeholder Partnership, Education and Communication (SPEC) tax specialists.

Earned Income Tax Credit (EITC) - The provider must comply with IRC 6695(g).

Third Parties - A provider may associate with third parties during the course of his/her business. Under no circumstances may the third parties engage in any behavior or practice that is in violation of the provisions of Pub 3112, and Pub 1345. If the provider derives benefit from misrepresentation of IRS e-file or from unethical practices of the third parties, the provider may be warned or sanctioned depending on the nature of the violation.

Return Responsibility - The ERO must sign and complete all requested information in the "Declaration of Electronic Return Originator (ERO) and Paid Preparer" section. If the return was prepared for a fee, then the ERO must input the "paid preparer information" into the electronic tax return. Paid preparers must disclose their preparer tax identification number (PTIN) on the copies they supply to taxpayers. Paid preparers are not required to disclose their social security number (SSN) or employee identification number (EIN) on the copies they supply to taxpayers.

The ERO of the return must sign and complete all requested information in the "Certification and Authentication—Practitioner PIN Method Only" section of Form 8879.

Providers cannot knowingly and directly or indirectly employ or accept assistance from any firm, organization, or individual prohibited from applying or participating in IRS e-file, including providers previously suspended or expelled.

If filed returns are found without the appropriate return preparer signature and/or return preparer identifying number, a penalty under IRC 6695(b), Failure to Sign Return, and/or IRC 6695(c), Failure to Furnish Identifying Number, may be applicable. Consult the EMC regarding assessment of these penalties.

At the conclusion of the visit, the monitor and/or the monitoring team must issue a "Summary of Findings" to the provider. The "Summary of Findings" should reflect all items reviewed by the monitoring team. If no violations are noted during the visit, the "Summary of Findings" should reflect the results of each item reviewed. If any violations of IRS e-file rules are found, a complete explanation of the violations should be documented on the "Summary of Findings." The monitor should discuss each violation with the provider and ensure that the provider understands what actions should be taken to come into compliance with IRS e-file rules. The provider and monitor(s) should sign and date the "Summary of Findings." The original "Summary of Findings" should be retained in the case file and a copy should be given to the provider. The "Summary of Findings" will serve as an attachment to the proposed written reprimand letter sent to the provider if violations were identified. See Exhibit 4.21.1-4, Sample Letter - Written Reprimand.

During the course of the e-file visit, the monitor may recognize compliance issues. Remember that the purpose of the visit is strictly to focus on the provider’s adherence to the guidelines in Rev. Proc. 2007-40, Pub 3112, and Pub 1345. If a compliance issue arises outside the parameters of the visit, a "referral" must be made timely to the proper authority for further action.

Monitoring may include reviewing IRS e-file submissions, investigating complaints, scrutinizing advertising material, checking Forms 8879, inspecting files and observing office procedures. If the monitoring team or monitor discovers the provider is noncompliant because of a violation of one or more of the rules governing IRS e-file, the monitoring team or monitor will issue a "Summary of Findings," a written warning to the provider, or recommend sanctions (written reprimand, suspension, or expulsion). There are various levels of infraction for sanctions based on the severity of the violations. The e-file provider has appeal rights after the imposition of sanctions.

A violation may result in a warning or a sanction of the Authorized IRS e-file Provider. Sanctions include written reprimands (level one infraction), suspensions (level two or level three infraction) or expulsions (level three infraction).

When it is determined the infraction(s) is serious enough to warrant suspension, but not egregious enough to warrant immediate suspension or expulsion from IRS e-file, the following actions should be taken:

The EMC must issue a proposed suspension letter, see Exhibit 4.21.1-5, Sample Letter - Proposed Suspension, within 14 days of the visitation. Include the following information in the proposed suspension letter:

Send copies of the proposed suspension letters to the owning and/or controlling provider, if applicable. Be sure to follow disclosure guidelines when providing copies of suspension letters to the owning or controlling provider.

Advise the W&I National Account Manager, if applicable.

Document the case history with actions taken, and follow-up action is required 30 days from the proposed suspension date.

If the provider fails to appeal the proposed suspension letter within the 30-day time limit, the provider is then considered suspended from participation in IRS e-file. The EMC must fax an E-File Monitoring Sanction Request, Exhibit 4.21.1-11 and a copy of the signed proposed sanction letter to IRS e-help.

When it is determined that the violation is serious enough to warrant immediate suspension or expulsion, ensure that all complaints and non-compliance issues are thoroughly documented in the case history, then take actions listed below.

The EMC must issue an immediate suspension or expulsion letter. The letter should be issued within 14 days of the visitation. Include the following information in the suspension letter:

See Exhibit 4.21.1-6, Sample Letter - Suspension.

Provide copies of the signed suspension letters to the following:

Advise the W&I National Account Manager, if applicable.

The EMC must fax an E-File Monitoring Sanction Request, Exhibit 4.21.1-11, and a copy of the signed proposed sanction letter to IRS e-help.

Suspended providers can reapply for participation in IRS e-file after they have served their period of suspension (sanction period) as defined in Rev. Proc. 2007–40 and Pub 3112.

The IRS will monitor an authorized IRS e-file provider for conformity with all rules and guidelines governing IRS e-file.

The IRS will monitor the Authorized e-file Provider's compliance in the following areas:

Reasonable cause should be applied when addressing the above, for example:

The provider must provide documentation establishing that the circumstances were beyond his/her control and that action is being taken to immediately resolve the violation (reasonable cause). If negligence is due to poor administration, a level two sanction should be considered.

In all cases, the IRS should review all factors relevant to the violation. In most cases, the provider will bring the issue to the IRS’s attention.

When the violation is minor, a written reprimand should be issued unless it is an infraction that is corrected and verified during the monitoring visit. In this case, a written warning should be issued.

In most situations, a provider can take corrective action to resolve the minor violation immediately.

When providers fail to correct a violation(s) after a warning letter is issued, a proposed suspension should be imposed (level two sanction). A suspension or expulsion (level three sanction) may be imposed if the violation(s) warrant it.

If it is determined that the provider has established a fiduciary relationship for accepting returns for the purpose of electronic filing, either directly or indirectly, from a firm, organization, or individual other then the taxpayer, this should be viewed as a level three violation warranting immediate suspension.

The provider should be made aware of the appeal rights regarding a written reprimand, suspension or expulsion. There are two levels of appeal for suspension and expulsion of participation in IRS e-file.

The first level of appeal is the "Administrative Review Process." A provider who has been advised of a proposed sanction has the right to an administrative review. When the provider receives the letter proposing sanctions, the provider may submit a detailed written explanation with supporting documentation as to why the proposed sanction action should be withdrawn within thirty (30) calendar days of the date of the letter proposing sanctions from the EMC. This written response should be sent to the EMC’s office that issued the proposed sanction letter. A local Administrative Review Panel will review the provider’s written response and will either withdraw the proposed sanction (see Exhibit 4.21.1-16, Administrative Review Reversing a Sanction Letter), or affirm it. The Administrative Review Panel generally consists of the EMC and the Penalty Screening Committee.

If the Administrative Review Panel upholds the sanction (suspension or expulsion), then the provider may proceed to the second level of appeal to the Office of Appeals. The appeal must be in writing and mailed to the IRS office that issued the recommended sanction letter within thirty (30) calendar days of the date of the letter recommending sanctions. The provider’s written appeal must contain a detailed explanation, with supporting documentation of why the recommended sanction should not be imposed.

Failure to respond within thirty (30) days, beginning with the date of either the proposed suspension letter or the recommended suspension letter, irrevocably terminates the provider’s right to an administrative review or an appeal.

A provider that receives a recommended or continued suspension or expulsion letter after the administrative review has a right to a formal appeal. See Exhibit 4.21.1-20, Recommended Suspension after Administrative Review Letter.

The appeal must be written and filed with the area office that issued the suspension or expulsion. A letter requesting formal appeal must be submitted to the EMC within 30 days of the date of the final sanction letter. A provider’s written appeal must contain a detailed explanation with supporting documentation of why the suspension or expulsion should be reversed.

In order for the Office of Appeals to sustain a suspension, the EMC must provide full documentation of the facts used in determining that the provider violated Rev. Proc. 2007-40, Pub 3112, and/or Pub 1345. In situations where the provider is alleged to have had knowledge of a specific fact, the EMC should provide substantiation of the provider's purported knowledge. The area office must provide an EUP summary of the provider's Form 8633 and a copy of the initial and final suspension or expulsion letters.

The office that issued the letter will, upon receipt of a written appeal from the provider, forward to the Office of Appeals the file with all related materials the provider has submitted to the area office. The file will be transmitted via Form 3210. The case file must contain the following:

This is especially true if the provider:

The case file of an administrative appeal to the Office of Appeals must be forwarded within 15 calendar days of receipt of the providers written request for appeal. The EMC will make a copy of the case file prior to forwarding. This copy will be used as the EMC’s administrative case file. The original case file should be sent via Form 3210 to:

Failure to appeal within 30 days from the date of the suspension or expulsion letter terminates the provider's right to a formal appeal.

The Office of Appeals will send a letter to the EMC indicating the results of the formal appeal.

The EMC must take the following actions:

To ascertain the number of e-file monitoring receipts/dispositions, such as planned/actual visits, referrals to CI and other actions during the calendar year, the following procedures will be used:

EMCs will maintain a master log of cases for all provider/preparer packages of random visits, targeted visits, and referrals of follow-up visits whether the visits were completed or not. See Exhibit 4.21.1-13, EMC's Master Log of Cases. This information will assist the EMC in the calendar year-end reconciliation of area e-file visits. This year-end reconciliation will be forwarded to the Exam HQ e-file analyst to ascertain a final count for the year.

The log will contain, at a minimum the following information:

The EMC’s "Master Log of Cases" will be reviewed and signed by the EMC's Manager to ensure accuracy prior to submission to Exam HQ e-file analyst at the conclusion of the program for the fiscal year. See IRM 4.21.1.30.8 (2) for due dates.

EMCs will maintain a master log of request for EFIN Suspensions for all faxes sent to IRS e-help for EFIN suspensions. See Exhibit 4.21.1-14, EMC's Control Log for Suspensions Sent to IRS e-help Campus. EMCs will document all follow-up contacts needed with the IRS e-help to ensure that the suspension actually occurred as requested. EMCs will check Form 8633 on EUP and place an updated printout in the provider’s case file.

The EMC’s Control Log for Suspensions sent to IRS e-help Campus will be reviewed and signed by the EMC's manager to ensure accuracy prior to submission to HQ at the conclusion of the program for the fiscal year. See IRM 4.21.1.30.8, Managerial Reports.

The EMC is responsible for coordinating all field aspects of the monitoring of the e-file providers’ operations. Annually, Exam HQ e-file analyst in conjunction with ETA will establish the number of the total visits required. This number is usually a percentage of the total number of active e-file providers in the database for the area. Prior to the completion of the monitoring visits, the EMC will:

Subsequent actions required by the EMC after the monitoring visits are completed may include:

The majority of time spent coordinating the e-file monitoring program takes place between October and the end of filing season in April; however, there will be some occasional referrals, quarterly reports, and case tracking after the filing season is complete.

The "Employee User Portal" is the internal IRS portal that allows employees to access IRS data and systems, such as TPDS, tax administration processing systems, financial information systems, and other data and applications, including mission critical applications. Registration and authentication are required for access to sensitive and mission critical applications and all user interactions with those systems are encrypted from workstation to portal across the IRS internal network. The EUP also allows IRS employee users with LAN accounts (Windows Network Login) to access intranet sites, selected applications, non-sensitive data, and selected sensitive processing where network encryption and modernization logon are not required (e.g., employees access to selected elements of their own personnel data). IRS network authentication is required for access to any secure materials or services, and is required in order to access registration and authentication. IRS employees access internal IRS applications through a portal accessible only from the IRS Intranet. The EUP authenticates internal IRS users and provides role-based access control to modernized applications. All web sites dealing with sensitive tax, identification, or financial data will be accessed via the EUP. At this time, modernized applications using the EUP for access include e-Services, Modernized e-file and Integrated Financial System (IFS). The database will be updated weekly throughout the year. Access to the website requires completion of an Online 5081, Automated Information System (AIS) User Registration/Change Request.

The e-file application database accessed through the EUP contains the following information:

The database may be searched by the following parameters:

The EMCs should contact the respective SPEC area office prior to visiting IRS sponsored VITA and TCE locations. SPEC visits many VITA and TCE locations to conduct quality reviews. Consideration must be given to each situation to determine if an e-file monitoring visit is appropriate. Duplicate visits by SB/SE and SPEC may not be necessary.