Privacy Impact Assessment – Electronic Filing System (ELF)
ELF System Overview:
The Electronic Filing System (ELF) receives electronically filed (e-filed) Form 1040 series individual income tax returns, validates them for consistency and completeness against the electronic file specifications in Publication 1346, sends electronic acceptance and rejection notifications, partially processes accepted returns, and forwards accepted returns for additional processing.
Other systems, treated as subsystems of ELF, perform related processing and testing. These are Participants Acceptance Testing System (PATS), Electronic Transmitted Documents (ETD), and ELF 8453 Problem Reporting System (EPRS).
PATS receives e-filed “made up” Form 1040 series and standalone documents test scenarios published in Publication 1436 and validates them for consistency and completeness against the electronic file specifications in Publication 1346. PATS allows external software developers, electronic return originators (EROs), transmitters, and Internal Revenue Service (IRS) to work out problems before “live” electronic filing begins. Because PATS uses “made up” test data only, PATS has no impact on privacy.
ETD receives e-filed standalone documents that are related to Form 1040 series individual income tax returns, validates them for consistency and completeness against the electronic file specifications in Publication 1346, sends electronic acceptance and rejection notifications, partially processes accepted documents, and forwards accepted documents for additional processing. These documents are Form 56 Notice Concerning Fiduciary Relationship, Form 2350 Application for Extension of Time to File U.S. Income Tax Return, Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, Form 9465 Installment Agreement Request, and electronic payment requests for the two extension forms. The data contained in these forms is a subset of the data contained in the 1040 series forms. Also, ETD shares system inputs and outputs with ELF. ETD has no additional privacy impact beyond what is listed for ELF below.
EPRS is the automation tracking system used by e-file employees to work the missing and incomplete Forms 8453, U. S. Individual Income Tax Declaration for an IRS e-file Return. When the e-filed Form 1040 series return is not signed using a Personal Identification Number (PIN), the completed Form 8453 must be mailed by the ERO to the IRS. The data contained in Form 8453 is a subset of the data contained in the 1040 series forms. Though EPRS is traditionally treated as a subsystem of ELF, EPRS does not share system inputs and outputs with ELF. Unlike ELF, EPRS includes a database.
System of Records Number(s):
Treasury/IRS 22.062, Electronic Filing Records
Treasury/IRS 34.037, Audit Trail and Security Records System.
Data in the System
1. Describe the information (data elements and fields) available in the system in the following categories:
A. Taxpayer
B. Employee
C. Audit Trail Information (including employee log-in info)
D. Other (Describe)
ELF:
A. ELF receives and processes electronically filed individual tax returns as defined in Internal Revenue Code (IRC) Section 6103(b)(2). This includes taxpayer name, address, and Social Security Number. It also includes:
* data about the nature, source, and amount of taxpayer income and income tax withholding,
* data to support deductions, exemptions, credits, and other tax benefits taken on the return,
* bank data to support taxpayer request for electronic payment of balance due or direct deposit of refund, and
* electronic signature data
ELF generally receives and processes the same tax return information that is found on paper Forms 1040/1040A/1040EZ and permitted attachments to these forms. A complete list of forms accepted electronically and their data elements and fields is found in the annually updated Publication 1346, Electronic Return File Specifications and Record Layouts for Individual Income Tax Returns.
ELF receives and forwards state income tax return information when a taxpayer chooses to electronically file both Federal and state tax returns through Internal Revenue Service (IRS).
ELF receives validity indicators from other IRS systems described in question 10 below.
B. ELF is a batch processing system with neither login nor direct employee access. ELF programmers may login to the MITS-3 General Support System (GSS), which manages the hardware and operating system on which ELF programs run, to view batch processing status. The MITS-3 GSS is outside the scope of the ELF system.
C. None. The MITS-3 GSS maintains an audit trail record of ELF programmer actions, but this is outside the scope of the ELF system.
D. On the tax return, ELF receives identifying information about third party Electronic Return Originators (EROs), transmitters, and paid tax return preparers. On the tax return, ELF also receives third party bank account information when a taxpayer chooses to accept a Refund Anticipation Loan (RAL) from the third party.
EPRS:
A. Taxpayer social security numbers (SSNs) and the related electronic return Document Control Numbers (DCN) are available in EPRS.
B. Employee initials are available when suspense data for incomplete Forms 8453 is manually added to the EPRS.
C. Employee login is required to access EPRS. Login information is maintained in an audit trail.
D. Electronic Filing Identification Number (EFIN) and related ERO entity and accepted return information is available in EPRS.
2. Describe/identify which data elements are obtained from files, databases, individuals, or any other sources.
A. IRS
B. Taxpayer
C. Employee
D. Other Federal Agencies (List agency)
E. State and Local Agencies (List agency)
F. Other third party sources (Describe)
ELF:
A. ELF receives validity indicators from other IRS systems described in question 10 below.
B. ELF does not obtain data directly from taxpayers. Taxpayers must e-file through EROs and transmitters.
C. None.
D. None.
E. None.
F. ELF receives taxpayers’ e-filed tax returns from third party EROs and transmitters.
EPRS:
A. The ELF15 Automated Reporting System (EARS) is accessed by EPRS in order to provide business identities and to retrieve business mailing address information used in the generation of correspondence. EPRS also accesses ELF15 data to determine the percentage of missing Forms 8435 for each ERO.
B. The mainframe delivers a Tax Return Data Base – R8453 (TRDB-R8453) extract file of overage missing Form 8453 data to the Andover and Austin EPRS each week via FTP.
C. Employee initials are included on the EPRS database when suspense data is manually added.
D. None
E. None
F. None
3. Is each data item required for the business purpose of the system? Explain.
ELF:
Yes. Each tax return data item is required so that IRS can correctly process the tax return and can try to implement any taxpayer request for forwarding of a state income tax return, payment of balance due, and disposition of overpayment. Each data item from sources outside ELF, described above in question 2, is used to validate tax return information.
EPRS:
Yes. EPRS obtains and processes only data items required to resolve Form 8453 problems.
4. How will each data item be verified for accuracy, timeliness, and completeness?
ELF:
Publication 1346 specifies the format for each tax return data item as well as business rules ELF uses to validate consistency and completeness of tax return information.
Tax return data is provided by the taxpayer. A tax return contains insufficient information for ELF to verify the accuracy of all data items.
ELF processes tax returns in batches. Tax returns in each batch must be processed, acknowledged, and forwarded to other systems described in question 10 before ELF can take in the next batch. ELF accomplishes this for each batch within a matter of days. Also, ELF accepts tax returns only for the tax year that is currently due.
EPRS:
EPRS has access to business entity data, which is manually reviewed, to ensure accurate addresses on EPRS-generated letters. EPRS receives a weekly update of missing Form 8453 data. A cursory review of letters is made prior to issuance.
5. Is there another source for the data? Explain how that source is or is not used.
ELF: No.
EPRS: No.
6. Generally, how will data be retrieved by the user?
ELF: Not applicable.
EPRS: EPRS users retrieve data by sorting the data base into a specific order and selecting the record to be modified. Specific reports are also retrievable on the EPRS.
7. Is the data retrievable by a personal identifier such as name, SSN, or other unique identifier?
ELF: Not applicable.
EPRS: Yes, the data can be scanned for a specific record by searching on employee initials, letter date, SSN, EFIN, DCN or name control.
Access to the Data
8. Who will have access to the data in the system (Users, Managers, System Administrators, Developers, Others)?
ELF: Not applicable.
EPRS: EPRS users are e-file employees in Andover Submission Processing Center (ANSPC) and Austin Submission Processing Center (AUSPC). The 8453 Program Analyst also has access.
9. How is access to the data by a user determined and by whom?
ELF: Not applicable.
EPRS: EPRS access is determined by an employee’s manager based on the employee’s position and need-to-know. An employee requests access by submitting an application on the electronic Form 5081 system. The manager approves or denies the request electronically on the Form 5081 system.
10. Do other IRS systems provide, receive, or share data in the system? If YES, list the system(s) and describe which data is shared. If NO, continue to Question 12.
ELF: Yes.
ELF receives batches of electronic tax returns and sends batches of tax return acceptance and rejection notifications through the Electronic Management System (EMS). When a taxpayer participates in Federal/State e-file through IRS, ELF forwards the electronic state tax return to the State Retrieval System (SRS-1), a subsystem of EMS.
ELF sends names and Social Security Numbers (or other tax identifying numbers) from the tax return to the National Account Profile (NAP). ELF receives from the NAP indicators of validity of the name/SSN combination and of prior use of the SSNs on other tax returns in the same tax year.
The Third Party Data Store (TPDS) provides a valid Electronic Filing Identification Number (EFIN) file that ELF uses to validate ERO/transmitter information.
ELF sends Routing Transit Numbers (RTNs), provided by taxpayers for direct deposit of refunds, to the Financial Organization Master File (FOMF). FOMF returns an indication of an RTN’s validity. FOMF is updated monthly from a file received from Department of the Treasury, Financial Management Service.
ELF sends bank account and electronic payment information to the Electronic Federal Tax Payment System (EFTPS) to initiate taxpayer-requested electronic payments.
ELF sends accepted electronic tax returns to the Generalized Mainline Framework (GMF) for further processing.
ELF sends accepted electronic tax returns to the Tax Return Data Base (TRDB) for archiving.
ELF sends accepted electronic tax returns to the Electronic Fraud Detection System (EFDS) for pre-refund detection of potentially fraudulent tax returns.
ELF sends a subset of tax return information to the Electronic Tax Administration Research and Analysis System (ETARAS). Information includes Social Security Number (or other tax identifying number), selected lines from Forms 1040/1040A/1040EZ, error reject codes, and electronic transmission software package used by the ERO/transmitter.
ELF sends statistical counts of forms, schedules, error reject codes, and other data to the ELF Automated Reporting System (EARS) and the intranet-only E-File Reports Web Page.
EPRS: TRDB-R8453 sends a weekly overage missing Form 8453 file to EPRS. The file contains the return DCN, taxpayer SSN, Return DLN, and taxpayer name line for each missing Form 8453 record.
EARS provides EPRS with access to ERO entity data provided by the Third Party Data Store and access to ELF15 data.
EPRS provides NSA-033 “Generate ELF Letters” with files containing ERO entity data and taxpayer SSN/DCN data for the creation of missing Form 8453 letters. This process is a Tier-1 “run” on the Mainframe.
11. Have the IRS systems described in Item 10 received an approved Security Certification and Privacy Impact Assessment?
System C&A? PIA?
EMS y n
NAP n y
TPDS unk y
EFTPS y y
GMF n y
TRDB y y
EFDS y y
ETARAS both expired
EARS n y
E-File
Rpt Web n n
NSA033 n/a y
12. Will other agencies provide, receive, or share data in any form with this system?
ELF: No.
EPRS: No.
Administrative Controls of Data
13. What are the procedures for eliminating the data at the end of the retention period?
IRM Exhibit 1.15.32-1 stated retention schedule is, “Delete when 1 year or when no longer needed for administrative, legal, audit, or other operational purposes whichever is sooner.”
14. Will this system use technology in a new way? If "YES" describe. If "NO" go to Question 15.
ELF: No.
EPRS: No.
15. Will this system be used to identify or locate individuals or groups? If so, describe the business purpose for this capability.
ELF: No.
EPRS: The EPRS is used to identify EROs that have not submitted required Forms 8453 or that have submitted incomplete Forms 8453. This capability is used to issue letters to identified Electronic Return Originators.
16. Will this system provide the capability to monitor individuals or groups? If yes, describe the business purpose for this capability and the controls established to prevent unauthorized monitoring.
ELF: No.
EPRS: No.
17. Can use of the system allow IRS to treat taxpayers, employees, or others, differently? Explain.
ELF: Yes.
While IRS strives for all individual taxpayers to be eligible to e-file, ELF is not yet capable of accepting and processing all individual tax returns. Examples are Forms 1040NR, 1040NREZ, 1040PR, and 1040SS. ELF may not be capable of processing tax returns containing some esoteric tax law situations.
Some provisions of late year tax legislation may not be implemented right away, depending on resources and prioritization.
Some inconsistencies that cause ELF to reject tax returns cannot be corrected, forcing taxpayers to file these returns on paper.
Some tax return data may flag a tax return for special processing, such as disaster or combat zone notation.
ELF derives codes and processing parameters from tax return information and information received from other systems listed above in question 10. Codes and processing parameters may initiate or bypass manual review of tax returns.
EPRS: No.
18. Does the system ensure "due process" by allowing affected parties to respond to any negative determination, prior to final action?
ELF: Yes. When ELF rejects a tax return, the taxpayer and ERO/transmitter have the opportunity to correct inconsistencies and retransmit the tax return.
Once ELF accepts the tax return, the tax return may still have some problems or errors. After ELF forwards it to the other systems listed in question 10 above, the taxpayer will have additional opportunities to respond to any notice of change to the tax return.
EPRS: Yes, suspension letters issued to Electronic Return Originators due to Form 8453 non-compliance include procedures to request a review of our decision.
19. If the system is web-based, does it use persistent cookies or other tracking devices to identify web visitors?
ELF: Not applicable. ELF is not web-based.
EPRS: Not applicable. EPRS is not web-based.
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