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.
- Tax Preparers Who Prepare More than 10 Returns Must Now e-File
- $12.1 Million in Fraud under One EFIN?
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