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Addition of New Transmitter Encryption Options for Acceptance Testing in November 2004 and Discontinuance of Non-Encrypted Options for IRS e-file by November 2005

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Internal Revenue Service (IRS), Treasury.




Internal Revenue Service will provide the ability for IRS e-file program participants, who transmit directly to the Electronic Management System (EMS), to use approved encryption methods for the 2005 and later filing seasons, beginning with the Acceptance Testing System (ATS) in November 2004. For the 2005 filing season, IRS intends to begin discontinuing support of non-encrypted transmissions whether by dedicated or dial-up links on the Public Switched Telephone Network (PSTN) with complete phase out by November 2005. Authorized IRS e-file Software Developers should request a copy of the Interface Control Document (ICD), which describes requirements for Internet filing that utilizes Secure Sockets Layer (SSL) Version 3.0 with 128-bit encryption keys in an operational mode using the current modem based file transmission commands within a client commonly termed “TELNET/S”.


Authorized IRS e-file Software Developers should request the “Interface Control Document Between External Trading Partners and Electronic Management System for Encryption” from the Internal Revenue Service by May 28, 2004. Instructions for testing will be provided to the authorized developers at a later date.

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This information pertains to IRS e-file software developers who prepare software packages for direct dial-up transmission to IRS e-file EMS sites for individual and business electronic returns and electronic tax documents. This is for the Internet filing replacement of the current dial-up transmissions to the EMS but not for the Forms 1120 and 990 series submitted to the Modernized e-file platform through the Registered User Portal. If the software package for direct filing to IRS EMS provides for Internet filing, it must include an interface to the IRS EMS Front-End Processing Systems' Encrypted Interface URL site. For the 2005 filing season, IRS does not plan to include Internet connectivity for state taxing authorities who retrieve state returns from the State Retrieval Systems located in Austin, TX and Memphis, TN. IRS does plan to offer the States secure Internet access for 2006.


The Internal Revenue Service is charged with protecting taxpayer information using the most feasible, efficient and appropriate methods of protection available. Encrypting the transmissions between the trading partners and the IRS would enhance and complete the existing security provided by the trading partners' systems and by the IRS security zone.

Dedicated Line Filers

Based on an analysis of various e-file trading partner capabilities, the Internal Revenue Service announces that effective for the 2005 Filing Season, it will begin the use of a minimum 128-bit FIPS approved but trading partner-chosen, procured, and installed method of encryption for use on trading partner-provided dedicated line(s). These dedicated lines may continue to be terminated at the Austin and Memphis EMS locations and will permit use of the existing TELNET and FTP protocol methods. IRS will send to each dedicated line trading partner a revised annual Dedicated Leased Line Application on which the Trading Partner will be able to identify the evaluation number referencing the chosen encryption method (e.g., Brand, Model Number, FIPS 140-x, Evaluation Number xxx, and Evaluation Date). Means of terminating encrypted transmissions for dedicated line users could vary, determined by user configuration. For filers using dedicated lines terminating on IRS network equipment, the IRS will provide the IOS implemented 128-bit IPSec 3DES encryption services on the IRS equipment and provide configuration support for the Trading Partner equipment. IRS will contact each dedicated leased line Trading Partner after receiving a revised dedicated leased line application.

Internet Transmission Filers

Recognizing that the majority of e-commerce and e-government applications are migrating to the Internet and using standard technologies, the Internal Revenue Service will provide the ability for authorized e-file Trading Partners to electronically transmit return information via an IRS-provided and certified secure Internet transport. Use of this secure Internet transport will require the use of Secure Sockets Layer (SSL) Version 3.0 using 128-bit encryption keys in an operational mode using the current modem based file transmission commands within a client commonly termed “TELNET/S”. Note that EMS is unable to support the FTP protocol over the TELNET/S connection, but will continue to support Zmodem, YModem Batch, and XModem 1K. Support for SSL is provided at no extra cost in most Operating Systems available for the last five years, and is supported by the majority of Internet Service Providers (ISPs).

Cost Impacts and Taxpayer Burdens

The cost impact of the Internet SSL method to IRS e-filers is expected to be minimal. The transmitters will incur the cost of the ISP, however, many of them already have and use an ISP. Currently the transmitters must pay for the long distance telephone call to the IRS front-end sites, and must make multiple calls if their transmission volume is high. Historic technologies also incur “dropped” calls. With use of the Internet, these occurrences should be reduced. Additionally, dial up access to ISPs are normally via local calls, including alternate phone numbers.

Implementation Schedule

The IRS will attempt to ensure that the standards described in the ICD are generally compliant to those adopted by other IRS e-commerce Internet interfaces. The Internal Revenue Service will make a test facility available to its authorized e-file software developers on or about July 15, 2004, and have a production Assurance Testing (ATS) facility for authorized e-file transmitters and software developers by November 1, 2004.

The Internal Revenue Service encourages all current and prospective transmitters to begin using the new encryption methods by November 1, 2004. Dedicated leased line transmitters are encouraged to implement encryption at their earliest convenience and at a time that is mutually agreeable to both the trading partner and the Internal Revenue Service, prior to November 1, 2004.

Discontinuance of Existing Dial-Up Analog and Dial-Up ISDN Service

Effective December 1, 2003, the Service no longer accepts requests for support of IRS dial-up ISDN services. During 2005, the IRS will phase down the number of its existing analog, PSTN dial-up line services and its companion existing ISDN dial-up line services. The service will maintain an analog dial infrastructure to use if emergency conditions warrant. Full dial up Start Printed Page 25465infrastructure retirement is planned for 2006.


E-mail requests from authorized IRS e-file Software Developers for the Interface Control Document entitled E-FILE ENCRYPTION ICD to


Questions or concerns will also be taken over the telephone. Call Carolyn Davis—202-283-0589 (not a toll-free number). You may write to Carolyn E. Davis, Senior Program Analyst, IRS, Electronic Tax Administration, OS:CIO:I:ET:S:SP, 5000 Ellin Road, Room C4-187, Lanham, MD 20706.

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Dated: April 28, 2004.

Jo Ann Bass,

Director Strategic Services Division, Electronic Tax Administration.

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[FR Doc. 04-10361 Filed 5-5-04; 8:45 am]