Tax Professionals Handbook

• All Providers must comply with the requirements and specifications set forth in IRS Publications 1345, 1345A, 1346, 3112, and this North Carolina Handbook.
• Providers must ensure that electronic returns are filed in a timely manner.  The date of the IRS acknowledgment will be considered the filing date for a North Carolina return.  Electronic filers should confirm acknowledgment of the State return data packet by NCDOR before considering the State portion received.
• Stockpiling of returns for electronic transmission is not permitted.  Stockpiling is defined in the IRS Publication 1345 as “collecting returns from taxpayers or from authorized e-file providers  prior to official acceptance in the program or having more than a few days inventory of returns for electronic transmission in-house”.
• A Provider may only accept returns for e-file directly from taxpayers or from another accepted Electronic Filer.  If there is any doubt whether an individual or a firm using your service has been accepted by NCDOR to participate in e-file, contact the E-files and Development Unit.
• If an Electronic Filer charges a fee for the electronic transmission of a tax return, the fee may not be based on a percentage of the refund amount or on the amount of taxes.
• A Provider must ensure that an electronic return is filed on or before the due date of the return.  A tax return is not considered filed until the electronic portion of the tax return has been acknowledged as accepted.
• NCDOR will accept electronically filed North Carolina individual income tax returns that have been submitted for transmission to the IRS Philadelphia Submission Processing Center through October 15, 2007.  Any North Carolina returns submitted after October 15, 2007 must be filed as paper documents.  Error Resolution System/correspondence will be submitted to the Philadelphia Submission Processing Center.
• EROs should obtain two forms of identification from taxpayers in an effort to discourage abuse of the Electronic Filing Program.  Two pieces of identification should be reviewed prior to preparing returns or accepting returns for e-filing.  One piece of identification should be a picture identification that reflects the taxpayer’s name and current address, if available.  The second piece of identification should reflect the same name and the same social security number the taxpayer is using to file the tax return; such as a social security card.  
• The employer-issued state copy of the wage and tax statement is the only acceptablewage and tax statement.  Tax returns may be prepared using documentation of income
  and Federal tax withholding (such as a pay stub, Leave and Earning Statement, etc.),
  but the return must not be electronically filed prior to the ERO’s receipt of the related
  Form W-2, W-2G, or 1099-R.  If the taxpayer has not received a correct Form W-2,
  W-2G, or 1099R by February 15, a Federal Form 4852 or other documentation maybe
  needed to complete the Federal and State returns.
• The ERO must mail Form NC-478 and series A thru I to the Department.
• Transmitters who provide transmission services to other Electronic Filers must:
  1. Only accept electronic returns for transmission to NCDOR from an accepted Electronic Filer.
  2. Provide acknowledgment files to each client for their transmitted returns within  one work day after receipt of the acknowledgments from NCDOR.
  3. Include the ERO’s EFIN on each return that the Transmitter accepts from an ERO.
  4. Use their EFIN on returns for which they performed the duties of an ERO.
  5. Notify NCDOR if the Transmitter ceases business operations.
• Electronic Filers who function as Transmitters must:

1. Transmit all electronic returns within three calendar days of receipt and retrieve the acknowledgment file within two workdays of transmission.
2. Provide acknowledgment files to the ERO or Intermediate Service Provider within two workdays of retrieval from NCDOR.
3. Ensure the security and confidentiality of all transmitted data.
4. Ensure against the unauthorized use of its EFIN or ETIN.
5. Match the state acknowledgment files to the original transmission files and contact the E-file Development Unit if the state acknowledgment has not been received within three days of transmission.
6. Retain a state acknowledgment file received until the end of the calendar year in which the electronic return was filed.
7. Adhere to advertising standards as explained in the IRS Publications.