How to apply for EFIN and PTIN?

Are you currently working as a tax preparer for someone? Or Do you already have experience preparing tax returns? Either way, are you interested in starting your own tax business and wondering how to start and if this decision is right for you? With the ever-changing nature of the U.S. tax code, the demand for professional tax preparers will always be there.

Before your tax preparation business can get off of the ground, there are two important numbers you will need. To provide tax preparation services for compensation, – you must acquire a Preparer’s Tax Identification Number (PTIN). To electronically file tax returns, you must become an ERO and obtain an Electronic Filing Identification Number (EFIN).

Did you know you are not required to have any special training to become a professional tax preparer? According to the IRS, Any tax professional with an IRS Preparer Tax Identification Number (PTIN) can prepare federal tax returns.

What is PTIN?

A PTIN is an identification number all paid tax return preparers must use on U.S. federal tax returns submitted to the Internal Revenue Service. As a tax preparer, you can obtain a PTIN online at You must renew your PTIN each year after October 15.

Don’t have a PTIN and need to obtain one?

Most first-time PTIN applicants can obtain a PTIN online in about 15 minutes. The fee is $35.95, paid directly to the IRSand is non-refundable.

After you obtain your PTIN, the next step is to obtain your EFIN. Please know everyone who prepares tax returns in your office will need PTIN, whereas the business owner is the only person required to get EFIN.

What is an EFIN?

EFIN stands for Electronic Filing Identification Number. The EFIN gives your permission to submit tax returns to the IRS electronically. According to the IRS, Tax preparers who will file 11 or more tax returns must submit them electronically. Therefore, individuals interested in starting a tax business must become Authorized e-file Providers and obtain an Electronic Filing Identification Number (EFIN).

Who is an ERO?

The Electronic Return Originator (ERO) is the Authorized IRS e-file Provider who originates the electronic submission of a return to the IRS. The ERO is usually the first point of contact for most taxpayers filing a return using the IRS e-file system.

How to become an ERO and Apply for EFIN?

Although there is no cost, the EFIN application process will require you to submit your fingerprints and undergo a suitability check (criminal history, tax debt history, etc.). 

Three steps process:

  1. Step 1: Create an IRS e-Services Account 
  2. Step 2: Submit Your Application 
  3. Step 3: Pass a Suitability Check

Note that the IRS says the process can take up to 45 days. Also, some states may require that a tax preparer complete a separate application for state income tax return e-Filings.

How long it takes to get an EFIN?

The IRS says the process can take up to 45 days. Also, some states may require that a tax preparer complete a separate application for state income tax return e-Filings.

Once you obtain PTIN and EFIN, you are ready to start your tax business. The next step is to purchase professional tax software. Which software solution will be ideal for your business? That will depend on the types of tax returns, the volume of returns, and budget constraints—most companies offer several options. Once you purchase the software, you are ready to start training and filing tax returns.

Now that you have a lot of food for thought contact our team at NTO as you take your next steps towards starting a tax preparation business. Our team can save you time and ensure your tax preparation business is successful from the start.

What is a Refund Transfer?

Buy now, pay later might sound like the makings of a scam – but the truth is that offering customers the ability to access a tax preparer’s services without the need for an upfront cost brings more value to a tax business than it does harm.  Refund Transfer, also known as RT, is a product taxpayers can use to pay for their tax preparation services out of their tax refunds.

Besides the obvious value that clients receive from a refund transfer bank product, this business practice builds brand reputation and allows for a broader marketing approach and larger audience.

Before implementing a refund transfer bank product service, it’s important to understand how they work, how to best package the service for specific target markets, and the many benefits they bring to the tax professional and their clients.

Scale your business

How does the Refund Tranfer work?

Simple Process: Refund transfer bank products is a straightforward process; when a client is to receive a refund, they can choose to pay for the tax preparation services out of their refund instead of paying them upfront. This payment method is usually only available to the customers receiving a refund on their tax refund.

Before the tax professional receives their tax prep fee or the taxpayer receives their refund, the money must pass through a refund transfer bank, such as (Refund-advantage, SBTPG, Republic Bank, or Refundo). These institutions are known as refund transfer banks. They will divide the refund, deduct fees, and distribute the proper amount to the tax preparer and their clients.

While the client needs to be aware of a fee associated with each refund transfer, the pure convenience of paying for the tax service with a portion of the refund carries a higher value than the relatively small fee associated with refund transfers. This makes refund transfer bank products a desirable payment method.

6 reasons you should offer a Refund Transfer program?

  1. Allowing your clients access to professional tax preparation with no money out of pocket.
  2. Improve the speed of receiving tax refunds for customers that don’t have a traditional bank account.
  3. allow your office to expand. Earn revenue, and compete with national chains.
  4. Customers without a bank account can take advantage of electronic filing with the IRS.
  5. Electronic filing helps speed up the time it takes to receive refund proceeds. Compared to a check mailed by the IRS to the customer, which could take 6-8 weeks from the time of filing.
  6. Safety, fewer worries about checks lost in the mail or stolen out of mailboxes.

In conclusion, Tax refund transfer bank products bring an array of benefits to tax professionals and their clients by increasing brand reputation, generating referrals, and ensuring payment – ultimately benefiting both sides.

What is a Service Bureau?

A Tax Software Service Bureau is a company that provides business services for a fee. You may ask yourself how Service Bureau fits into the Retail Tax Preparation Industry. The service bureau business model is one of the little-known secrets in the Tax Industry. As a result, very few people openly discuss the benefits of being your service bureau and what it is.

Simply put, a service bureau provides tax software, Training, and ongoing support to tax professionals. If you already own a tax office or are in the tax industry, creating your own Service Bureau brand is one of the most lucrative business models in the industry.

Start a service bureau. Call

3 ways Service Bureaus generate income

There are multiple revenue sources that Service Bureaus can tap into within the tax industry. Typically generate revenue off of each bank product funded within their Service Bureau.

Service Bureau Fee:

You may have software currently through a service bureau or have seen a line item in your software for Service Bureau Fees. In most cases, this is how the service bureau earns money. For example, every time you or your office file a bank product tax return, that fee is debited from your customers’ refund and paid to your service bureau.

The biggest misconception regarding Service Bureau Fees is that the SB Fee is something the tax preparer is charging and earning, which is not true in most cases. Instead, the revenue generated from Service Bureau Fees is getting paid to the Service Bureaus.

Tax Software:

Service Bureaus usually have Co-Branded software, Which means that the software they have is custom to their Tax Business brand. With their Co-Branded software, they can re-sell to tax preparers, tax business owners, and even other tax professionals looking for tax software. They also have the freedom to sell the licenses to use their software for whatever price they want and charge yearly renewal fees for those licenses.

Revenue Splits:

Revenue Splits are a big revenue generator for Service Bureaus who choose to offer them. A Revenue Split is where the Service Bureau makes a percentage of all tax preparation fees charged by the preparer for the services provided to the preparer by the Service Bureau. This Revenue Split is separate from the Service Bureau fee. The most common Revenue Splits are 70/30, 80/20, or 90/10, with the smaller percentage going to the Service Bureau. Usually, with the Revenue Split option, the Service Bureau provides additional services other than software sales. For example, software training for the preparer and staff of the Tax Business, assistance with marketing, and ongoing support.

In short, If you are a seasoned tax professional looking to grow your business and revenue or want to get out of the tax preparation side of the business, then starting your own Service Bureau might be the right move for you.


  • There has been a 114% increased growth in the past 20 years of women entrepreneurs running businesses. Still in the US only 4 out of 10 business are Women-Owned. Women are making moves in the right direction at an historic speed.
  • In 2019 women started a net total of around 1,821 new businesses every single day. 64% of those businesses were by women of color. So, the biggest growth in Women-Run Business was made up by the majority of women of color taking the leap in starting Small Businesses.
  • Those Small Businesses started weren’t just casual side hustles or borderline hobbies. There are statistics that show 62% of Women Entrepreneurs Businesses are their primary source of income. Women are taking a chance and putting in the work to ensure their small businesses are a success.
  • Most women don’t even apply or look for business financing. Only 25% of women apply for any type of business financing in comparison to the 33% of men who do. Women also ask for an average of $77,000 while men ask for an average of $109,600.
  •  Forbes shared that women-founded companies in the venture capital firm First Round Capital’s portfolio outperformed those founded by men by 63%. Women are out here doing things in a big way in the venture backed space, considering that only a mere 7% of venture funds were given to Women-Owned Startup’s.
  • Though it may be hard for Women-Owned businesses to be approved for conventional loans, 57.4% of SBA Microloan Program Loans were given to Women-Owned or Women-Led Businesses.
  • Women-Owned Businesses added half a million jobs in the US between 1997 and 2007. If women start and continue to support each other through education and resources, they could add even more jobs increasing prosperity and helping the economy.

NEW 2021 REJECT CODE: F8962-070

This is the IRS’ top reject so far across the country, across all software vendors. Please disseminate this to your staff as you see fit.

  • This reject occurs when the IRS database has record of any SSN on the return receiving an advance payment.
    • Taxpayer, spouse, dependent.
  • Even if they received an advance payment for just one month, the 8962 is required.
  • Providers have until January 31st to mail the 1095-A to taxpayers, so many have not received theirs yet.
  • If they dispute the need for the 8962, the return will be processed by hand, which will result in significant delays, usually 3-6 months.
  • History also tells us the IRS tends to bypass the bank products on many of these hand processed returns. They simply mail a check to the taxpayer.
  • We are still awaiting guidance from the IRS about attaching a PDF for dispute/calculations.

This website has a great deal of useful information on the subject: