Chapter 1

Introduction

The North Carolina Department of Revenue (NCDOR) will accept electronically transmitted individual income tax returns for tax year 2007. This transmission will be in conjunction with the Internal Revenue Service’s (hereafter referred to as the IRS) existing E-File Program. The taxpayer’s state return can be filed with his/her federal return or the state return can be filed separately. The program for the 2006 tax year was very successful. During 2007, NCDOR processed over 2.2 million individual income tax returns received through the cooperative program.

NCDOR requires all tax professionals to be accepted into the Federal program before they can participate in the Federal/State E-File Program. Tax professionals do not need to submit an application to NCDOR to be accepted into the E-File program nor does a tax professional need to submit a copy of the federal acceptance letter to participate in the E-File program.

The North Carolina Handbook is to be used with IRS Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns, and IRS Publication 1345A, Filing Season Supplement for Authorized IRS e-file Providers of Individual Income Tax Returns. The North Carolina Handbook sets forth those items that are specifically unique to NCDOR. All rules, regulations, and requirements specified by the IRS governing tax preparers, transmitters, and originators of returns are in effect for NCDOR.

The IRS provides detailed instructions on hardware, transmission procedures, policies, etc. in Publications 1345 and 1345A. We encourage participants to study and become familiar with these documents.