Don't Be Shocked by E-Filing Glitches

By Ken Berry

The IRS is concerned that e-filing by tax return preparers could be short-circuited by hackers. As a result, it has updated the FAQs on its website outlining the steps to take if your electronic filing identification number (EFIN) is compromised.
E-filing is now required for most tax return professionals, but the IRS makes it easy to become an authorized e-filer and to obtain an EFIN. All you have to do is apply online. After you pass a suitability check, the IRS will send you an acceptance letter, including the EFIN, so you can file an unlimited number of tax returns electronically.
But that doesn't mean your protection is complete. If an unauthorized person hacks into the system – typically by using your EFIN to gain access to files – it could lead to problems for you and your clients. Check your status online to ensure that the number of returns you've e-filed in the last two years matches your records. If it doesn't, your EFIN may have been compromised.

What Sets Off the Alarms?

The IRS provides the following common examples of when an EFIN may be compromised:

  • If you had an EFIN at your previous firm but moved to another firm, you can't use the EFIN from your previous firm. 
  • If you haven't used your EFIN to e-file in the last two years, you must apply for a new EFIN. If you're in doubt, call the e-help desk at (866) 255-0654 (available Monday through Friday, 6:30 a.m. to 10:00 p.m. central time) to find out if your EFIN is still valid.
  • If a deceased person is listed on the application and the person's death changes the structure of the business entity, the EFIN may be invalid for use. If you're unsure, call the e-help desk at (866) 255-0654 (available Monday through Friday, 6:30 a.m. to 10:00 p.m. central time).
What should you do in that case? Run – don't walk – to the nearest phone to call the IRS e-help desk at (866) 255-0654 (available Monday through Friday, 6:30 a.m. to 10:00 p.m. central time) to lodge a report of a possible compromised EFIN.
If an EFIN has in fact been compromised, the IRS says it will disable it, issue a new one, and notify the firm in writing when the new EFIN is authorized. If use of the unauthorized EFIN was intentional, it will also review the situation to see if further action is needed. The IRS may also notify those who are transmitting a compromised EFIN.
Take care of matters before the trickle of early tax returns turns into a flood.  
To read all the FAQs posted online about EFINs, visit the IRS website

You may like these other stories...

Being an accountant doesn't mean you're giving investment advice to clients. However, at tax time, accountants often have to deal with the results of any investment advice clients obtained during the year—the...
Anti Burger Kings: Seven US companies shrinking tax the old-fashioned wayBurger King’s decision to combine with Canadian donut shop Tim Hortons is renewing controversy over the lengths some US companies will go to...
A new report released on Tuesday found that the US airline industry receives nearly $1 billion in tax breaks annually from states for jet fuel.The study, conducted by UNITE HERE International Union, a labor union that...

Already a member? log in here.

Upcoming CPE Webinars

Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.