In this seminar we address the rules and requirements for participating in IRS e-file by Authorized IRS e-file Providers filing Individual Income Tax Returns and related forms and Schedules.

Print this page, work on the questions and then submit test by mailing the answer sheet or by completing quiz online.

Instructions to submit quiz online successfully: Step-by-Step check list

Answer Sheet            Quiz Online

Material needed to complete this assignment:

You will need IRS Publication 1345 and IRS Publication 3112 to complete this topic.

1. A firm authorized by the IRS to participate in IRS e-file

A. Submits an e-file application.
B. Meets the eligibility criteria.
C. Must pass a suitability check before the IRS assigns an EFIN.
D. All of the above.

2. Filing state individual income tax returns electronically is an additional business decision. Federal/State e-file is cooperative tax filing between the IRS and most of the states that have income taxes. Each participating state

A. Adopts the IRS e-file requirements.
B. Requires that applicants be accepted to participate in IRS e-file before they accept the applicant to participate in their state electronic filing program.
C. Has requirements that have to meet the requirements of the IRS.
D. Has different requirements but if it is a piggy-back state filing an application with Federal will suffice.

3. Prior to submitting the IRS e-file Application to the IRS, each individual who is a Principal or Responsible Official must

A. Register for e-Services on the IRS Web site.
B. Register as a Responsible Official.
C. Register as the Principal for a sole proprietorship.
D. All of the above.

4. This is an individual with authority over the Provider's IRS e-file operation at a location, is the first of contact with the IRS, and has authority to sign revised IRS e-file applications. He or she also ensures the Provider adheres to the provisions of the revenue procedure.

A. The President.
B. The Principal.
C. The Responsible Official.
D. Any of the above.

5. Each individual who is a Principal or Responsible Official must

A. Be a United States citizen or an alien lawfully admitted for permanent residence.
B. Be 21 years of age as of the date of Application.
C. Meet applicable state and local licensing and/or bonding requirements for the preparation and collection of tax returns.
D. All of the above.

6. The IRS conducts a suitability check on the applicant, and on all Principals and Responsible Officials listed on e-file applications to determine the applicant's suitability to be an Authorized IRS e-file Provider. Suitability checks may include

A. A criminal background check.
B. A credit history check.
C. A tax compliance check to ensure that all required returns are filed and paid, and to identify assessed penalties.
D. Any of the above.

7. The IRS reviews each firm or organization, Principal, and Responsible Official listed on the IRS e-file Application. The following could be a reason to be denied participation in IRS e-file

A. An indictment or conviction of any criminal offense under the laws of the United States or of a state or other political subdivision, or an active IRS criminal investigation.
B. Failure to file timely and accurate Federal, state, or local tax returns, or failure to timely pay tax liabilities.
C. Stockpiling returns prior to official acceptance to participate in IRS e-file.
D. Any of the above.

8. Standard 1 applies to Authorized IRS e-file Providers participating in Online Filing of Individual income tax returns that collect taxpayer information via the Internet. The providers shall

A. Possess a valid and current Extended Validation Secure Socket Layer (SSL) certificate using SSL 3.0/TLS 1.0 or later.
B. Minimum 1024-bit RSA 128-bit AES.
C. Both A and B above.
D. Use windows XP Pro or better.

9. Standard 2 applies to Authorized IRS e-file Providers participating in Online Filing of individual income tax returns that collect, transmit, process or store taxpayer information. The following is a true statement regarding e-file security and Privacy Standard number 2.

A. Providers shall contract with an independent third-party vendor to run weekly external network vulnerability scans of all their "system components" in accordance with the applicable requirements of the Payment Card Industry Data Security Standard (PCIDSS).
B. All scans shall be performed by a scanning vendor certified by the Payment Card Industry Security Standards Council and listed on their current list of Approved Scanning Vendors (ASV).
C. Providers whose systems are hosted shall ensure that their host complies with all applicable requirements of the PCIDSS.
D. All of the above.

10. "System components" means any network component, server or application that is included in or connected to the taxpayer date environment.

True False

11. Standard 3 applies to Authorized IRS e-file Providers participating in Online Filing of individual income tax returns that own or operate a Web site through which taxpayer information is collected, transmitted, processed or stored. In addition, Standard 3 states that Providers shall

A. Be diligent in recognizing and preventing fraud and abuse in IRS e-file.
B. Have a written information privacy and safeguard policy consistent with the applicable government and industry guidelines and including the following statement: "we maintain physical, electronic and procedural safeguards that comply with applicable law and federal standards".
C. Implement an effective challenge-response protocol to protect their Web site against malicious bots.
D. All of the above.

12. Standard 4 applies to Authorized IRS e-file Providers participating in Online Filing of individual income tax returns that own or operate a Web site through which taxpayer information is collected, transmitted, processed or stored. The Providers shall

A. Implement an effective challenge-response protocol (e.g., CAPTCHA) to protect their Web site against malicious bots.
B. Not collect, transmit, process or store taxpayer information unless the user successfully completes a challenge-response test.
C. Continue collecting taxpayer information via their Web site with caution until the incident is successfully resolved.
D. Both A and B above.

13. Standard 5, Public Domain Name Registration applies to Authorized IRS e-file Providers participating in Online Filing of individual income tax returns that own or operate a Web site through which taxpayer information is collected, transmitted, processed or stored. These providers shall

A. Have their Web site's domain name registered with a domain name registrar that is located in the United States.
B. Have a Web site that is accredited by the Internet Corporation for Assisted Names and Number (ICANN).
C. Have a domain name that shall be locked and not be private.
D. All of the above.

14. Standard 6 applies to Authorized IRS e-file Providers participating in Online Filing of individual income tax returns that collect, transmit, process, or store taxpayer information. These Providers shall

A. Report security incidents to the IRS once every month.
B. Report security incidents to the IRS as soon as possible but not later than the next business day after confirmation of the incident.
C. Continue collecting taxpayer information via their Web site cautiously upon detection of an incident and until the underlying causes of the incident are successfully resolved.
D. Be aware that an event can be a result in an unauthorized disclosure, misuse, modification or destruction of taxpayer information are not considered a reportable security incident.

15. The following statement is a true statement regarding direct deposit of refunds.

A. A provider must never charge a separate fee for Direct Deposit and must accept any Direct Deposit election by a taxpayer to any eligible financial institution.
B. The taxpayer may never split refunds between different accounts; only one account may be used for Direct Deposit.
C. Taxpayers often elect the Direct Deposit option because it is the fastest way of receiving refunds, and it is even faster if the taxpayer designates refunds for Direct Deposit to credit card accounts.
D. The provider can alter the Direct Deposit information in the electronic record after the taxpayers have signed the return if the information was entered incorrectly.

16. The following is a method of signing individual income tax returns with an electronic signature available for use by the taxpayers. This method allows taxpayers to use a personal identification Number (PIN) to sign the return and the Declaration of Taxpayer.

A. Self-selected PIN which is a method that requires taxpayers to provide their prior year Adjusted Gross Income (AGI) amount or prior year PIN for use by the IRS to authenticate the taxpayers.
B. The Practitioner PIN which is a method that doe not require the taxpayer to provide their prior year AGI amount or prior year PIN, but must appropriately sign a completed signature authorization form.
C. Both A and B above.
D. None of the above.

17. The ERO must retain Forms 8879 and 8878 for ____________ from the return due date or the IRS received date, whichever is later and must not send Forms 8879 and 8878 to the IRS unless the IRS requests they do so.

A. 2 years.
B. 3 years.
C. 4 years.
D. 5 years.

18. EROs must not electronically file individual income tax returns prior to receiving Forms W-2, W-2G or 1099-R. If the taxpayer is unable to secure and provide a correct Form W-2, W-2G. The ERO may electronically file the return after the taxpayer completes Form 4852, in accordance with the use of that form. If Form 4852 is used,

A. The ERO can submit copies of taxpayer's W-2.
B. The ERO can only paper file the income tax returns for the taxpayer.
C. The non-standard W-2 indicator must be included in the record, and the ERO must maintain Form 4852 in the same manner required for Forms W-2, W-2G and 1099-R.
D. The ERO can stockpile returns at his office.

19. EROs must retain the following material until the end of the calendar year at the business, address from which it originated the return or at a location that allows the ERO to readily access the material as it must be available at the time of the IRS request. An ERO may retain the required records at the business address of the Responsible Official or at a location that allows the Responsible Official to readily access the material during any period of time the office is closed, as it must be available at the time the IRS request thought the end of the calendar year.

A. A copy of Form 8453 and supporting documents that are not included in the electronic records submitted to the IRS.
B. Copies of Form W-2, W-2G, 1099-R and a copy of signed IRS e-file consent to disclosure forms.
C. A complete copy of the electronic portion of the return that can be readily and accurately converted into an electronic transmission that the IRS can process and the acknowledgement file for the IRS accepted returns.
D. All of the above.

20. Providers must not use improper or misleading advertising in relation to IRS e-file, including the time frames for refunds and RALs or other financial products. A provider must not

A. Advertise that individual income tax returns may be electronically filed prior to the Provider's receipt of Form W-2, W-2G and 1099-R, as the Provider is generally prohibited from electronically filing returns prior to receipt of Form W-2, W-2G, and 1099-R.
B. Imply that the Provider does not need Form W-2, W-2G or 1099-R, or that is can use pay stubs or other documentation of earnings to e-file individual income tax returns.
C. Advertise a RAL or other financial product that is not easy to identify or in readable print and must make clear in the advertising that the taxpayer is borrowing against the anticipated refund or receiving another financial product and is not obtaining the refund itself from the financial institution.
D. Any of the above.