Before you enroll in the e-file program, decisions will need to be made about:

• Volume and type of  returns you plan to e-file
• Type of  Transmission - Direct or through a third-party
• Software Selection

The volume of  tax returns a tax preparer submits may affect the choice of software they select as well as the method of return submission.  There are three methods an ERO can use to submit a tax return electronically:

1. Transmit the return information directly to the IRS.
2. Electronically submit the return to a Transmitter who will send it to the IRS.
3. Submit a tax return to an Intermediate Service Provider for processing prior to transmission to the IRS.

The IRS does not impose a fee to tax preparers who file tax returns electronically. A tax preparer may have to absorb the costs of  tax preparation software, which enables electronic filing.  However, when an ERO uses an Intermediate Service Provider or other transmitter there may be additional costs and/or charges for each return submitted.  Generally, the more returns you e-file, the cheaper the cost.

Questions You'll Want to Ask Before You Buy

Answers to these questions may help you decide which software you'll purchase. 

1. Is it user-friendly?
2. Is it menu driven?
3. Does it meet the needs of your client base?
4. Does it have help screens?
5. Does it have screens for all forms and schedules?
6. Do the screens look like standard IRS tax forms for ease of input?
7. Does if verify math calculations for each page?
8. Are there diagnostic checks for duplicate SSNs, Declaration Control Numbers (DCNs), and bank account numbers?
9. Does it have a correction mechanism for IRS rejected returns?
10. Are diagnostic checks built into the software, or performed by transmitter?
11. Does it print Form 8453 before transmission?
12. Are there built-in safety features to prevent accidental deletion of files?

Cost Considerations  $$$$

1. What is included in the quoted price?
2. Modem?
3. Additional programs?
4. What is price structure for filing returns?
5. Is there a per return cost?
6. Is there a charge for rejections?
7. Is there a charge for retransmissions?
8. Are there volume discounts for number of returns submitted?
9. Can you install the software on multiple systems for the quoted cost?

Return Transmission Questions

1. Does the software allow for direct transmission to the IRS?
2. Indirect transmission to the software company who sends it on to the IRS?
3. Both?
4. Does the software require a specific modem, speed, or communication protocol for transmission?
5. Does it allow for submission through the Internet?

Technical Support & Service

1. Is the user manual easy to understand?
2. Is there a tutorial included?
3.  Does the software vendor offer hands-on training?
4.  Is there a toll-free telephone number, fax number, 24 hour help line?
5. How many software program updates were there last year? 
6. Were they due to IRS changes, or problems with the software? 
7. How are software updates issued?  Modem?  Internet?  Express mail?