Important Information for Authorized IRS e-file Providers for 2002
Forms W-2 Are Required
It is important that income tax returns reflect the correct amount of income
and federal income tax withheld. Correct information establishes an accurate
return and when applicable, a valid claim for refund of overpayment of withheld
taxes. To ensure accurate returns and valid claims for refunds, the Internal
Revenue Service continues to require that Electronic Return Originators (EROs)
receive Forms W-2 from taxpayers prior to the origination of the submission of
the electronic return. The importance of verifying and reporting questionable
Forms W-2 is explained in
SAFEGUARDING the IRS
e-file
Program from Fraud and Abuse
below. Only upon receipt of Form W-2 can an ERO ensure the accuracy and
validity of the income and withheld taxes that is the basis of a taxpayer's
return and claim. In this second year of addressing ERO compliance with this
requirement, the IRS intends to appropriately sanction violators of this
requirement. Sanctioning will be in accordance with Revenue Procedure 2000-31
and Publication 1345, Chapter 6. If you have actual knowledge that an ERO is
originating the electronic submission of a return prior to the receipt of Form
W-2 you may advise the IRS by calling 1-800-829-1040. You will be referred to
your local
e-file
monitoring coordinator to provide the name and address of the ERO.
SAFEGUARDING the IRS
e-file
Program from Fraud and Abuse
All Authorized IRS
e-file
Providers must be on the lookout for fraud and abuse in the IRS
e-file
Program. In addition to the toll-free number, 1-800-829-0433, listed in
Publication 1345 for reporting suspicious activity, the Service is adding fax
numbers and an e-mail address as new ways to report fraud and abuse. In
addition, we are providing some guidance on what to look for and how to report
it.
Indicators of abusive or fraudulent returns may be unsatisfactory responses to
filing status questions, multiple returns with the same address, and missing or
incomplete Schedules A and C income and expense documentation.
A "
fraudulent
return
" is a return in which the individual is attempting to file using someone
else's name or SSN on the return or where the taxpayer is presenting documents
or information that have no basis in fact.
NOTE:
Fraudulent returns should not
be filed with the Service.
A "
potentially abusive return
" is a return that
is not a fraudulent return;
the taxpayer is required to file;
but may contain inaccurate information and may lead to an understatement of a
liability or an overstatement of a credit resulting in production of a refund
to which the taxpayer may not be entitled.
NOTE:
A financial institution's decision to deny a bank product is not necessarily
an indication of a potentially abusive return.
The Service has identified questionable Forms W-2 as a key indicator of
potentially abusive or fraudulent returns. When examining Forms W-2 that appear
suspicious, ask for valid identification. If you believe Forms W-2s are not
genuine, provide the following information to the IRS using the below format:
Field Source Format
Acknowledgement Date
IRS Acknowledgement MM/DD/YYYY
DCN IRS Acknowledgement
14 numbers including leading zeroes
Primary SSN Return
Like 123-12-1234
Primary Taxpayer Name Return
Full name as spelled on return in 1 field
Taxpayer Address Line 1 Return
Full address shown on return
Taxpayer Address City Return
City part of address shown on return
Taxpayer Address State Return
State part of address shown on return
Taxpayer Address Zip Return
Zip part of address shown on return
Employee SSN Form W-2
Like 123-12-1234
Employee Name Form W-2
Full name as spelled on Form W-2 in 1 field
Employer EIN Form W-2
Like 12-1234567
Employer Name Form W-2
Full name as spelled on Form W-2 in 1 field
Employer Contact Name
Person calling Employer to verify Form W-2 Full name in 1 field
Employer Contact Phone
Person calling Employer to verify Form W-2 Like 123-123-1234
Notes
Person submitting report Multi-line note field
You should report fraudulent or abusive returns and questionable Forms W-2 to
the Internal Revenue Service by calling 1-800-829-0433, e-mailing the
information to HQ-ORF@ci.irs.gov, or faxing the information to the fraud
detection center for your state indicated below. E-mailed or faxed reports
should include appropriate information as shown in the chart above. Describe
the false items in the field designated for notes.
FRAUD DETECTION
STATES
CENTER
FAX NUMBER
CT, MA, ME, NH, RI, VT, UPSTATE NY, MI
ANDOVER
(978) 691-6902
GA, NC, SC, AL, FL
ATLANTA
(770) 454-1746*
TX, NM, AZ
AUSTIN
(512) 460-7436
BROOKLYN, MANHATTAN, NJ
BROOKHAVEN
(631) 447-4608
OH, KY, WV, IN
CINCINNATI
(859) 669-3711
CA
FRESNO
(559) 265-7258
IL, WI, ND, SD, NE, IA, KS, MO
KANSAS CITY
(816) 823-8543
AR, TN, MS, LA, OK
MEMPHIS
(901) 546-3148
CO, MT, WY, UT, NV, ID, OR, WA, AK, HI
OGDEN
(801) 620-6806
PA, VA, MD, DE
PHILADELPHIA
(215) 516-1445
*The Atlanta Fraud Detection Center will be moving in November 2001. A new FAX
number will be available in January 2002.
Debt Indicator
Beginning with filing season 2002, the debt indicator code (DI) will be present
in all IRS
e-file
acknowledgment files. In prior years, the DI was made available to taxpayers
whose authorized IRS
e-file
providers were participating in a pilot program. The DI indicates whether the
taxpayer owes a debt to the IRS or one of the agencies managed by the Financial
Management System (FMS). This field will be either N (none), I (IRS), F (FMS),
or B (Both). FMS debts are for past due student loans, child support, federal
taxes, state taxes, or other governmental agency debts. If the taxpayer is
expecting a refund, it may be offset if a debt is owed. The debt indicator code
may be shared with the taxpayer.
Using Third Parties for IRS
e-file
Related Activities
Authorized IRS
e-file
Providers may associate with third parties for IRS
e-file
related activities only if the third party agrees to adhere to all applicable
requirements for participation in the IRS
e-file
Program as set forth in Revenue Procedure 2000-31 and in publications and
notices governing the IRS
e-file
Program. The IRS may require the Provider to discontinue their association
with third parties not adhering to the IRS
e-file
Program requirements. The IRS may also sanction a Provider that knowingly and
directly or indirectly associates with a third party that is not adhering to
applicable IRS
e-file
requirements.
Items of Interest to All Tax Professionals
Employer Identification Numbers (EINs):
Beginning January 2, taxpayers will be able to get an employer identification
number by calling a toll-free number,
(866) 816-2065
.
IRS employees in the Brookhaven, Cincinnati, and Philadelphia service centers
will be responding to taxpayer calls for EINs. Taxpayers can also fax a request
to one of the locations accepting applications. Faxed requests may take up to
48 hours to process, whereas taxpayers calling in during business hours will be
able to get their number immediately.
Third parties can also now receive an EIN on a client's behalf by completing a
new third-party designee section on the EIN application. The new procedure
eliminates the need for practitioners to file a separate third-party
authorization form.
Nationwide Practitioner Hotline
Also beginning January 2, tax practitioners nationwide will be able to get
priority service when calling the IRS.
Practitioner Priority Service
1-866-860-4259
Practitioner Priority Service is a new toll-free, accounts-related service, for
all tax practitioners, nationwide. It will be the practitioners' first point of
contact for assistance regarding taxpayers' account-related issues. This
service will replace the former Practitioner Hotline.
Practitioner Priority Service Fact Sheet
What is Practitioner Priority Service?
A toll free, accounts service for all tax practitioners, nationwide.
Practitioners' first point of contact for account-related issues.
Replaces Practitioner Hotline service.
How will Practitioner Priority Service operate?
Hours of service will be 7:30 a.m. to 5:30 p.m. local time (with the exception
of Alaska and Hawaii, which will be Pacific Time), weekdays.
80% Level of Service objective.
It will operate out of the five campus sites:
Brookhaven, NY
Cincinnati, OH
Memphis, TN
Ogden, UT
Philadelphia, PA
Calls will be routed to a designated site based on the practitioner's area
code.
Each site will handle both individual and business inquiries
Issues outside the scope of the employee's authority will be priority routed to
other IRS functions.
When will Practitioner Priority Service begin?
Start date January 2, 2002
It will be rolled out in three phases at 45-day intervals (see attachment A)
January 2, 2002
Feb 18, 2002
April 1, 2002
How will the transition to Practitioner Priority Service occur?
On the start date of each phase, the following will take place:
Designated Practitioner Priority Service telephone and fax numbers will be
discontinued and a message will provide callers with the new toll-free number.
Designated states/area codes will begin using the new toll-free number.
A listing of the discontinuing telephone numbers and the states/area codes
affected in each phase will be provided to practitioners through the IR Web and
a comprehensive communication package developed especially for practitioners.
What are the benefits of Practitioner Priority Service?
This service will be
toll-free
.
Improvement in the overall consistency and quality of service to practitioners.
Practitioners will receive a higher level of service.
Employees answering these calls will receive specialized training to handle
practitioner issues.
All information provided is general in nature and intended to create awareness,
not to address the specific circumstances or concerns of any individual or
entity. Although we try to provide correct and timely information, we cannot
guarantee the accuracy of any information or that such information will
continue to be accurate in the future due to the changing nature of the tax
laws. Before acting on any of the information provided here, you should consult
with a professional advisor who knows all of the unique facts and circumstances
pertinent to your particular situation.