How to Become an Electronic Return Originator (ERO)

Every tax preparer who submits returns electronically on behalf of clients is operating as an Electronic Return Originator (ERO). Most preparers hold this designation without fully understanding what it means, what the IRS requires of them under that designation, and what happens if they fall out of compliance.

This guide covers the ERO designation from the ground up: what it is, how it differs from related terms like EFIN and transmitter, what the IRS requires before you can hold the status, and the ongoing compliance obligations that come with it. It is written for tax preparers who file electronically or are preparing to, not for consumers.

The IRS is the sole authority that issues ERO authorization. Nothing here changes the IRS process or shortens the timeline. What this guide does is lay out the requirements accurately so you are not surprised by any part of the application or the ongoing obligations that follow.

What Is an Electronic Return Originator (ERO)?

An Electronic Return Originator is a category of IRS-authorized e-file provider. Specifically, an ERO is the firm or individual that originates the electronic submission of a tax return to the IRS. That means the ERO accepts the return from the taxpayer (or prepares it on their behalf), reviews it for completeness, and either transmits it directly to the IRS or sends it to an authorized transmitter for submission.

The IRS defines the ERO role in IRS Publication 1345 (Handbook for Authorized IRS e-file Providers), which is the governing document for all authorized e-file providers. If you originate electronic returns for clients, you are an ERO under Publication 1345 and the rules in that document apply to you.

ERO vs. Transmitter vs. Intermediate Service Provider

The IRS recognizes several types of authorized e-file providers. The three most relevant to working preparers are:

• Electronic Return Originator (ERO): Originates the electronic submission of returns to the IRS. This is the category that covers the vast majority of professional tax preparers. The ERO is the preparer's role.
• Transmitter: Sends the electronic return data directly to the IRS through the Modernized e-File (MeF) system. A transmitter may or may not also be an ERO. Many preparers who are EROs use a separate authorized transmitter (such as ATP) to handle the actual IRS submission rather than applying for transmitter status themselves.
• Intermediate Service Provider (ISP): Processes return data between the ERO and the transmitter. ISPs are typically software or technology companies that handle data formatting and routing. Most individual preparers do not hold ISP status.

For a working tax preparer running an independent office, the relevant designation is ERO. The transmitter function can be handled by ATP or another authorized third party. You do not need transmitter status to file electronically for clients.

The ERO's Role in the E-File Process

In practice, an ERO's responsibilities in the e-file process are:

• Accepting completed returns from taxpayers or preparing the returns directly
• Obtaining required taxpayer signatures (Form 8879, IRS e-file Signature Authorization, for most individual returns)
• Reviewing the return for accuracy and completeness before transmission
• Transmitting the return to the IRS (directly or through an authorized transmitter)
• Retaining required records and responding to IRS correspondence regarding returns the ERO originated

Who Needs ERO Status?

Any tax professional who submits returns electronically to the IRS on behalf of clients needs ERO status. This applies to solo preparers, partners in multi-preparer firms, and firm owners who manage a filing practice.

The IRS also requires paid preparers who meet a volume threshold (currently ten or more returns per calendar year) to file those returns electronically, which means ERO status is not optional for any active professional preparer above that threshold. Verify the current threshold at IRS.gov, as the rules are subject to change.

EFIN vs. ERO: What Is the Difference

These two terms are related but not the same thing.

An EFIN (Electronic Filing Identification Number) is the six-digit number the IRS assigns to you when your e-File Application is approved. It is the credential number that appears on the returns you originate and that the IRS uses to identify your filing activity.

An ERO is the role or designation. When the IRS approves your EFIN application and you are authorized to originate electronic returns, you are functioning as an ERO. Obtaining an EFIN is what makes you an authorized e-file provider in the ERO category. The EFIN is the number; ERO is what you are.

Practically speaking, the path to becoming an ERO runs through the EFIN application. You cannot be an authorized ERO without a valid EFIN. See our full EFIN application guide for step-by-step instructions on that process.

ERO Requirements: What the IRS Requires

To become an authorized ERO, you must satisfy each of the following requirements. The IRS evaluates all of them as part of the EFIN application and suitability check process.

Active PTIN (Preparer Tax Identification Number)

You must hold a current, active PTIN before applying for an EFIN. The PTIN identifies you as the individual preparer who signed the return. Every paid preparer who signs a return is required to have one, and it must be renewed annually. If you do not yet have a PTIN, complete that step first. See our PTIN registration guide for the process.

EFIN (Electronic Filing Identification Number)

The EFIN application is submitted through the IRS e-Services portal. The IRS reviews every applicant through a suitability check that covers federal tax compliance, criminal background, and prior IRS program history. The EFIN is what formally authorizes you to originate electronic returns. See our EFIN guide for the full application walkthrough.

Suitability Check: What the IRS Reviews

The IRS suitability check evaluates every principal applicant and responsible official listed in the e-File Application. The review covers:

• Federal tax compliance (your personal tax obligations must be current)
• Criminal background history
• Prior issues with IRS programs, including prior EFIN revocations or suspensions

Non-credentialed preparers (those without an active CPA, attorney, enrolled agent, enrolled retirement plan agent, or enrolled actuary credential) are generally required to submit fingerprints through an IRS-approved channeler as part of the suitability check. Verify the current fingerprinting requirement and the approved channeler list at IRS.gov before scheduling.

Compliance with IRS Publication 1345

Once authorized, every ERO is bound by IRS Publication 1345, the Handbook for Authorized IRS e-file Providers. This document governs how EROs accept returns from taxpayers, obtain and retain signatures, handle rejected transmissions, protect taxpayer data, and communicate with the IRS. It is updated periodically; EROs are responsible for staying current with each revision.

IRS-Approved Tax Software

EROs must use software that has been tested and approved by the IRS for use with the Modernized e-File (MeF) system. Using software that is not on the IRS-approved list puts returns and your authorization at risk. See the software requirements section below for more detail.

ERO Due Diligence Obligations

ERO authorization is not a one-time clearance. It comes with ongoing compliance obligations that apply throughout every filing season. Violations can result in penalties, EFIN suspension, or revocation of your authorized e-file provider status.

Form 8867: Paid Preparer's Due Diligence Checklist

If you prepare returns that include claims for the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), American Opportunity Tax Credit (AOTC), or Head of Household (HOH) filing status, you are required to complete and retain Form 8867 (Paid Preparer's Due Diligence Checklist) for each such return. Form 8867 must be submitted with the return. The IRS can assess a penalty per return for each failure to comply with these due diligence requirements. Verify the current penalty amount at IRS.gov; it is adjusted periodically.

Record Retention: Three-Year Requirement

EROs are required to retain records related to electronically filed returns for three years from the date the return was filed or the due date of the return, whichever is later. Records that must be retained include signed Forms 8879, copies of the returns as filed, any supporting documentation collected from the taxpayer, and acknowledgment records from the IRS confirming acceptance or rejection of the transmission.

Prohibited Practices

Publication 1345 and IRS regulations prohibit several practices that are worth stating plainly:

• Delaying the transmission of a return without a legitimate reason
• Conditioning e-file services on a client using a specific bank product or refund vehicle
• Charging a separate fee solely for e-filing that is structured as a percentage of the refund
• Directing a refund to any account other than the taxpayer's (unless a properly authorized bank product is in place)
• Filing a return without the taxpayer's knowledge or without obtaining the required signature authorization

Data Security and Gramm-Leach-Bliley Compliance

EROs are subject to the Gramm-Leach-Bliley Act (GLBA) safeguards rule, which requires tax preparers who are "financial institutions" under that statute to implement a written information security plan (WISP). The IRS has reinforced this requirement and expects EROs to maintain reasonable security measures to protect taxpayer data. Your WISP should address how you store, access, transmit, and dispose of taxpayer information. The IRS provides a model security plan for small tax practices at IRS.gov; it is not mandatory, but it is a useful baseline for preparers building their first WISP.

Data security is an ongoing obligation, not a one-time setup task. The IRS expects preparers to review and update their security practices regularly and to report data theft incidents promptly.

How to Become an ERO: Step-by-Step

Becoming an authorized ERO follows a defined sequence. Each step depends on the one before it. Do not skip ahead, and do not begin transmitting returns until the IRS has issued your EFIN.

Ready to Set Up E-File for Your Practice?

ATP provides IRS-authorized e-file transmission for TaxWise users. Once your EFIN is issued, connect with ATP to register your number and start submitting returns through a transmitter that has been doing this since 2001.

Software Requirements for EROs

Every ERO must use tax software that has been tested and approved by the IRS for the current tax year. Using unapproved software to originate or transmit returns is a violation of your authorized e-file provider status.

IRS-Approved Software List

The IRS publishes the list of approved tax preparation software products annually at IRS.gov. Approval is based on the software passing IRS testing requirements for accurate return formatting and successful transmission through the MeF (Modernized e-File) system. Verify that the software you are considering is on the current approved list before purchasing.

MeF System Compatibility

The IRS processes electronically filed returns through its Modernized e-File (MeF) system, which replaced the older legacy e-file system. Any software used by an ERO must support MeF-format electronic submissions. All current IRS-approved software products meet this requirement.

TaxWise by Wolters Kluwer

TaxWise, published by Wolters Kluwer, is an IRS-approved professional tax preparation software designed for independent preparers and small-to-mid-size offices. It supports individual and business return types and integrates with the MeF system for electronic submission.

America's Tax Professionals (ATP) is an authorized CCH TaxWise reseller. ATP also provides IRS-authorized e-file transmission, so TaxWise users who purchase through ATP have a single point of contact for both the software and the transmission service.

View TaxWise packages available through ATP.

What to Look for When Choosing ERO Software

Beyond IRS approval, evaluate software on these practical criteria:

• Support for the specific return types you prepare (1040, business returns, state returns)
• Built-in due diligence tools for EITC, CTC, AOTC, and HOH claims (Form 8867 completion and retention)
• E-file acknowledgment tracking so you know the status of every return you originate
• Record retention support (the software should preserve copies of returns as filed)
• Preparer support during filing season, when turnaround time on technical questions matters most
• Bank product integration if you offer refund advances to clients

Frequently Asked Questions About ERO Status