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Announcement 2006-87 October 30, 2006

Request for Applications to Participate in the
2007 IRS Individual e-file Partnership Program

The Stakeholder Partnerships, Education and Communication (SPEC) function within the Internal Revenue Service (IRS) is continuing its efforts to establish IRS e-file partnerships with various entities. The IRS is seeking non-monetary e-file partnerships for Filing Season 2007. No applications for funding (monetary compensation) will be considered. A commercial business, non-profit organization, state government or local government may submit applications. Applications are not solicited from other Federal government agencies. The program is an annual program and covers the period January through October 15, 2007. All prior year partners must reapply for Filing Season 2007.

BACKGROUND

The IRS Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to receive 80 percent of all returns electronically by 2007. RRA 98 authorized the IRS Commissioner to promote the benefits of and encourage the use of e-file services. RRA 98 enables the IRS to enter into non-monetary partnerships with businesses to offer low cost income tax preparation and electronic filing for qualified taxpayers.

Continued opportunities for growth in electronic tax administration are evident. For Filing Season 2006, the IRS received more than 72 million electronically filed returns, an increase of 6.26% over the previous year. Visit the IRS web site, http://www.irs.gov , for the most current results from market research on individual taxpayers, including demographic data and psychographic studies. This research includes attitudinal surveys, customer satisfaction surveys, Public Service communications, tracking studies and any focus group results.

The IRS accepts many forms and schedules for electronic filing. Visit the IRS web site for a complete listing of accepted forms and schedules.

FILING SEASON 2007

For Filing Season 2007, the IRS will focus on the 1040 series income tax returns covering “IRS e-file Using a Tax Preparer” and “IRS e-file Using a Personal Computer.” Additional emphasis continues to be placed on the following features: electronic signature options, Federal/State e-file, and electronic payment options for balance due and estimated payment options.

A major area of emphasis is to reach those taxpayers who continue to file computer prepared paper returns (v-code). Research indicates that the number of v-code returns continues to increase (76% of all v-code returns are prepared by paid preparers). Emphasis should be placed on converting v-code filers to electronically file their returns through advertising the benefits of e-file.

Participants should also reach those individuals eligible for the Earned Income Tax Credit (EITC). It’s important to note that military families may qualify for EITC since supplemental payments and combat pay are exempt from the income calculations.

Participants are encouraged to focus on reducing the number of errors made on electronically filed returns, including those returns claiming EITC. The “EITC Assistant” is an interactive web-based tool designed to help tax professionals determine whether or not their clients are eligible for EITC, and why. The “EITC Assistant” is a step taken by the IRS to maximize taxpayer participation, minimize EITC errors while increasing compliance. You can find the “EITC Assistant” on the IRS web site at http://www.irs.gov/eitc .

The Hispanic population is the fastest growing minority segment in the U.S. Participants are encouraged to market their e-file services to this segment and offer the Spanish versions for online filing and/or downloadable software.

The IRS expects all accepted partners to market, promote and offer e-file product and services through October 15, 2007. The IRS will supply the partners with the key marketing messages that support electronic filing during the Filing Season (January through April 16, 2007) and post-Filing Season (April through October 15, 2007). These messages should be used in your promotion of electronic filing and displayed on the web sites of Participants. Utilization of these messages will ensure uniformity and maximize public awareness. For additional information on the various e-file programs, features, and market research, visit the IRS web site at http://www.irs.gov .

Participants will receive hyperlinks from the IRS web site — irs.gov (Partners Page) — to the Participant’s web site. Potential Participants may request links for the following categories:

  • IRS e-file Partners for Taxpayers

  • IRS e-file Partners for Tax Professionals

  • IRS e-file Partners for Financial Institutions/Employers

  • IRS e-file Partners for Credit Card Payment Options.

Safeguarding Taxpayer Data

The security of taxpayer accounts and personal information is a top priority for the IRS. Tax professionals must implement safeguards to protect taxpayer’s data. It is not only the law, but it is good business practice, as it increases customer confidence and trust. Refer to Publication 4557, Safeguarding Taxpayer Data, a Guide for Your Business, which describes the various security provisions and rules that impact tax professionals. The document assists tax professionals in understanding their requirements for protecting the privacy and confidentiality of taxpayer data, and provides guidance on implementing the necessary security controls within their business to satisfy these requirements. Publication 4557 can be accessed at http://www.irs.gov .

PARTICIPATION STANDARDS & REQUIREMENTS

Participants will abide by the following standards and requirements, if applicable:

  • The Participant was actively engaged in the electronic tax preparation and filing industry in 2005 and 2006.

  • The Participant (Electronic Return Originator, Intermediate Service Provider, Software Developer, and Transmitter) must be in good standing with the IRS, comply with the e-file requirements stated in the IRS Revenue Procedure 2005-60, current versions of Publications 1345, 1345A, 3112, and pass the annual Suitability and Participants Acceptance Testing (PATS) conducted by the IRS. You can find the IRS e-file technical publications on the IRS web site at http://www.irs.gov.

  • The Participant will comply with the privacy provisions of 26 U.S.C. § 7216 and U.S.C. § 6103.

  • The Participant will be required to prove and display third-party certifications for the privacy/security/authenticity of its online service. The Participant’s web site should display the third-party certification and privacy seals. Participants must use software that will enable their web sites to state their privacy practices in a standard machine-readable format that can be retrieved automatically and interpreted easily by users.

  • Participants will comply with the security provisions in applicable Department of Treasury/IRS rules including, but not limited to, 31 C.F.R. Part 10, IRS Rev. Proc. 2005-60, current versions of IRS Publications 1345, 1345A, and 3112, and 26 U.S.C. § 7216. In addition, Participants must comply with the Federal Trade Commission’s Gramm-Leach-Bliley Act to protect the security of taxpayer information. Refer to Publication 4557, Safeguarding Taxpayer Data, a Guide for Your Business, for guidance on various security rules and provisions that impact tax professionals. The document can be accessed at http://www.irs.gov.

  • The Participant will offer their products and services to filers of the 1040 Series returns, including complex returns, balance due returns, Federal/State returns, and 1040EZ returns.

  • The Participant will clearly disclose its customer service support options (including associated fees, if any) and privacy policy on the landing page of its web site. Participants must provide taxpayers with a business contact point by on-line form, email, mail, facsimile or telephone number which the Participant maintains and reviews.

  • The Participant is encouraged to offer the Spanish versions for online filing and/or downloadable software. The Participant who offers Spanish versions for online filing and/or downloadable software will have customer service support to assist Hispanic taxpayers.

  • The Participant will target v-coders and individuals eligible for EITC.

  • The Participant will focus on reducing the number of errors on electronically prepared returns, including those returns claiming EITC.

  • The Participant will offer a variety of e-file features including the Self-Select PIN, Electronic Payment Options, Federal/State e-file, Direct Deposit of Refunds, etc.

  • The Participant will market, promote and offer e-file services through October 15, 2007. The Participant should use the key marketing messages, provided by the IRS, for the promotion of Filing Season and Post Filing Season electronic filing and place them on your web site.

  • The Participant may choose to offer either free tax preparation or free e-file services, but not both.

  • The Participant will be permitted only one (1) hyperlink on the IRS e-file Partners Page per category:

    • IRS e-file Partners for Taxpayer

    • IRS e-file Partners for Tax Professionals

    • IRS e-file Partners for Financial Institutions/Employers

    • IRS e-file Partners for Electronic Payment Options

    • The Participant will provide the IRS with a description (not to exceed 200 characters including spaces) for each hyperlink placed on the IRS e-file Partners Page. The hyperlink description may describe multiple offers/services.

  • The Participant will not have a URL(s) containing the word “IRS.”

  • The Participant will be required to supply the IRS with a link to their web site in their application or no less than ten (10) business days before the site is expected to go live (start date of electronic filing). All sites must be examined before they can be posted on the IRS e-file Partners Page. The purpose of the review is to ensure each Participant’s web site complies with the standards and requirements set forth in this announcement.

  • The Participant’s web site will not contain inappropriate content. Participant web sites must meet the following criteria:

    • The site clearly relates to and complements existing information, products and services on irs.gov.

    • The site contains relevant and useful content that will benefit our customers.

    • The site contains accurate and timely information.

    • The site provides information at no cost. The Participant will not link to sites whose primary purpose is to sell products or services (unless it is part of an approved agreement with IRS).

    • The site has an excellent overall quality and professional image.

    • The site is easy to navigate.

    • The site is a credible source for information. The site must be free of typos and errors so that it does not detract from the readability of the site.

    • The site does not exhibit hate, bias, or discrimination.

    • The site does not contain misleading or unsubstantiated claims or conflict with the mission of the IRS.

  • A Participant’s web site must be functionally adequate and consistent with the Participant’s offer in permitting a taxpayer to complete their return. Failure to comply may result in the Participant’s removal from the Partners Page.

  • The Participant will adhere to industry best practices to ensure the taxpayer return information entrusted to them is secure and the privacy of such information is maintained. In any instance where a Participant contracts with a service provider to obtain technology services, it will adhere to this standard. To the extent multiple Participants rely on a single service provider for front or back office services (not ISP services), it is even more critical that such taxpayer security and privacy be maintained with respect to others who share these services.

  • Whenever taxpayers are requested or required to provide their SSN, it must be part of a secure session. Participants are not permitted to use SSNs as a requested field for registration purposes or for establishing a taxpayer account on-line.

  • The Participant will display the IRS e-file logo on the landing page of its web site. The e-file logo and guidelines can be downloaded from http://www.irs.gov.

  • The Participant will have a link(s) to the IRS web site, http://www.irs.gov, from its web site.

  • The Participant must provide taxpayers a method to obtain the status of their tax return. Taxpayers can be directed to “Where’s My Tax Refund?” located on the Homepage of the IRS web site at http://www.irs.gov.

  • The Participant will prominently display on the landing page of its web site the promotion of income tax preparation and electronic filing for individuals eligible for EITC.

  • The Participant is encouraged to offer a monetary incentive (reduced return preparation and electronic filing costs) to attract taxpayers.

  • The Participant will disclose limitations in the forms and schedules that are likely to be needed to support their offerings. The Participant should clearly display a listing of the forms and schedules that will be offered either visible or accessible from the Participant’s landing page.

  • The Participant will clearly disclose a listing of the States that their software supports either visible or accessible from the Participant’s landing page.

  • The Participant is permitted to offer commercial products and services consistent with obtaining the positive consent of the user as described in 26 U.S.C. 7616 before offering fee-based products and services not related to tax preparation.

  • The Participant will include a feature in their tax preparation software that will “time out” the session after no changes are made for a period of time consistent with best practices approved by privacy seal certification programs.

  • The Participant that learns of an inappropriate disclosure of a taxpayer’s return information to an unauthorized Person must report the unauthorized disclosure to the IRS immediately but no later than five (5) hours after detection; and immediately shut down its program at the time of detection.

  • The Participant will submit written notification (e.g., email) to the IRS of changes, additions and deletions to URLs, link descriptions, etc.

  • The Participant will submit Performance Reports to the IRS Point of covering Filing Season and post Filing Season activity. The reports will cover information such as e-file statistics, web site activity and anything else the IRS deems necessary. The IRS Point of Contact will provide written reporting instructions and requirements to accepted Participants.

PERFORMANCE STANDARDS

  • The IRS will have the accepted Participant’s hyperlink(s) available on the IRS web site for the start of electronic filing, subject to the participant’s passing of the annual Suitability, PATS testing, and web site review. Hyperlinks will remain on the IRS e-file Partners Page through October 15, 2007, or at the discretion of the IRS.

  • The IRS will randomize on a daily basis the Participants’ offers listed on the IRS e-file Partners Page.

  • The IRS may establish a link from the IRS e-file Partners Page to the Free File web page.

  • The IRS will accept, if appropriate, the Participant’s written request for changes/additions/deletions to a URL, link description, etc.

  • The IRS will review the Participant’s web site(s) at any time to ensure that participation requirements are met.

  • The IRS will not endorse specific offerings or products, but will promote the IRS e-file Partners Page. A “Site Disclaimer” will be displayed upon exiting the IRS web site before the user enters the Participant’s web site.

PARTICIPATION TERMS

The IRS Individual e-file Partnership Program is an annual program, and all prospective Participants, including returning Participants, must reapply each year following the guidelines in the Internal Revenue Bulletin announcement advertised on http://www.irs.gov . If the IRS determines that the Participant is not meeting the “Participation Standards & Requirements,” the IRS may terminate its partnership with the Participant and remove the participant’s hyperlink(s) from the IRS e-file Partners Page.

  • The Participant will notify the IRS immediately if it wishes to terminate its partnership with the IRS. The notification should be submitted through email to the IRS Point of Contact or sent to the Point of Contact’s address indicated below in “IRS Point of Contact/Application Submission.”

APPLICATION PROCESS

Applications should contain the following information, if applicable:

  • Provide Primary and Secondary Points of Contact (name, title, address, cell/telephone number, fax number and email address) for discussion of your application and program participation.

  • Identify the Applicant’s secure web site.

  • Identify the Applicant’s tax preparation software and the States it will support.

  • Identify the IRS forms and schedules that support your offering(s).

  • Include the Applicant’s Electronic Filer Identification Number(s) (EFIN) and/or Electronic Transmitter Identification Number (ETIN).

  • Indicate if the Applicant will offer the Spanish versions for online filing and/or downloadable software. Describe customer service support for assisting Hispanic taxpayers.

  • Identify the Applicant’s hyperlink(s) and provide a short description (not to exceed 200 characters including spaces) of the services and products to be promoted on the IRS e-file Partners Page. In addition, the Applicant should provide the associated URL(s). The URL(s) cannot contain the word “IRS.” Indicate the category for each hyperlink:

    • IRS e-file Partners for Taxpayers

    • IRS e-file Partners for Tax Professionals

    • IRS e-file Partners for Financial Institutions/Employers

    • IRS e-file Partners for Electronic Payment Options.

  • Identify the Applicant’s third party administrators (i.e., VeriSign, Thawte, Truste) that certify the privacy/security/authenticity of its online service and provide certification that the Applicant’s current status is active and in good standing.

  • Identify the Applicant’s communication vehicle(s) (i.e., web site, marketing/promotional products, etc.) to market and promote your products and services and IRS e-file. Describe the incentives, discounts, offers, benefits to taxpayers or other specific approaches to increase e-file volumes.

  • Describe steps the Applicant will take to reach taxpayers that claim EITC. This can include marketing/promotional efforts, monetary incentives (reduced return preparation and electronic filing costs).

  • Describe steps the Applicant will take to reduce errors on electronically filed returns, including those returns claiming EITC.

  • Certify the Applicant’s compliance with the privacy and disclosure provisions of 26 U.S.C. 7216 and 26 U.S.C. 6103.

  • Certify the Applicant’s compliance with the Federal Trade Commission’s Gramm-Leach-Bliley (GLB) Act of 1999, Financial Privacy Rule and Safeguard Rules.

IRS POINT OF CONTACT/APPLICATION SUBMISSION

Applications to participate in the IRS Individual e-file Partnership Program should be submitted as a Word document through email at *[email protected] (Please make sure there is an asterisk before the WI (Wage and Investment) when submitting an application.) An application may also be sent to:

Internal Revenue Service
5000 Ellin Road
Lanham, MD 20706
Attention: Karen Bradley C4-132
SE:W:CAR:SPEC:FO:IMS

If you wish to have a hyperlink(s) on the IRS e-file Partners Page for the start of electronic filing, your application must be submitted by November 30, 2006. If your application is received after the deadline, there is no guarantee that it will be accepted by the IRS.

Any questions regarding the development of applications, the submission of Performance Reports, or any other type of contact for this program should be directed to Karen Bradley at (202) 283-7034 or through email to *[email protected] . Please make sure there is an asterisk (*) before the WI (Wage and Investment) for any type of email contact.

APPLICATION EVALUATION

All applications will be evaluated based on the required information provided to the IRS and the applicant’s ability to fulfill their responsibilities. Prior year performance will also be considered when evaluating applications from returning partners.

ACCEPTANCE/DENIAL OF APPLICATION

If your application is accepted, you will receive written notification from the IRS. If your application is denied, you will receive written notification from the IRS with an explanation of the denial.

e-Help

If you have any questions related to e-products/electronic filing, you can contact the e-Help Desk toll-free at 1-866-255-0654. The e-Help desk assistors are ready to respond to non-account related questions and issues. You can also go to http://www.irs.gov where the IRS houses a variety of information which impacts the tax professional.

Internal Revenue Bulletin 2006-44

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