With a matter of weeks before tax season, the Internal Revenue Service is reminding tax professionals to get their offices in order during these slower days before filing starts.
A little work done now can mean fewer headaches once the IRS starts taking in returns.
Update Your E-Services Information
E-Services encompasses a whole suite of tools to help tax pros, including the e-file application, the Transcript Delivery System (TDS), and a secure mailbox. Existing e-Services account holders should review their account information and contact data to make sure it’s correct and that user information is accurate.
New e-Services users will have to register first, then verify their identities using Secure Access authentication.
Principals, principal consents, or authorized responsible officials and delegated users must update the e-file application to ensure that all contact information is accurate. Individuals no longer associated with the firm must be removed from the application.
In order to use the TDS application, firms should ensure the appropriate people are approved on the application to avoid any delays in accessing client transcripts.
New offices that will send returns electronically have to file new e-file applications, even if the new office is opened by an existing firm that already e-files. Check out Publication 3112, IRS e-File Application and Participation, for any additional actions that might be needed.
The IRS reminds tax pros that their Electronic Filing Identification Number (EFIN) is not transferrable and cannot be sold, rented, leased, or provided with any software purchased. It can only be obtained from the IRS. Providers who sell, transfer or close their business operations must notify the IRS within 30 days.
Anyone who prepares or who helps prepare income tax returns for compensation must have a Preparer Tax Identification Number (PTIN) from the IRS and renew it every year. For the 2020 filing season, tax preparers have until Dec. 31, 2019 to renew their PTIN or to register for a new one. Enrolled agents must also have a PTIN and renew it annually.
Update Power of Attorney or Third-Party Authorizations
Tax pros who have existing power of attorney or third-party authorization (Forms 2848 and 8821) for clients should review those records. If the taxpayer is no longer a client, tax professionals should submit revocations to end the authorization. Follow the revocation instructions in Publication 947, Practice Before the IRS and Power of Attorney, to help safeguard taxpayer records.
Review Your Office Security
All paid tax preparers, no matter the office size, must have written information security plans as required by the Federal Trade Commission. Remember: It’s not just a good idea; it’s the law.
If your office still doesn’t have a written security plan, read IRS Publication 4557, Safeguarding Taxpayer Data, for an overview of basic security measures and information about the FTC’s Safeguards Rule.
Now would also be a good time to enlist the services of a cybersecurity expert to assess the office’s digital safeguards. At a bare minimum, tax offices should perform a “deep scan” for viruses and malware on all digital devices. The IRS Security Summit partners have other security tips available on their Taxes-Security-Together Checklist.
In addition, always remember to protect your PTIN and EFIN from theft or unauthorized use.
Review Practitioner Priority Service Options
The Practitioner Priority Service (PPS) is any tax pro’s first point of contact for account-related issues. Before calling, they should be sure to review the PPS page.
This IRS has a few guidelines for using the PPS: “Tax pros must verify their identity before PPS representatives can provide help. This process includes providing their Social Security number and date of birth. If a tax pro has a client in the room, they should consider having them step out or, alternatively, ask the client to make an oral disclosure authorization or oral tax information authorization to the IRS representative.”
As an alternative, tax pros can consider using the e-Services suite on IRS.gov. The fastest way to obtain a client’s tax transcript, for example, is using IRS e-Services and the Transcript Delivery System. After registering for e-Services, tax pros can receive account transcripts, wage and income documents, tax return transcripts, and verification of non-filing letters online.
Know Your Local Stakeholder Liaison
The IRS has specialists nationwide who can help tax pros who suffer a security breach that effects their clients. When a data theft occurs, contact the local IRS Stakeholder Liaison immediately.
To Stay in the Know, Get e-News and Quick Alerts
The IRS offers multiple registration-based list-services to assist tax professionals. For a weekly roundup of news releases and guidance, register for e-News for Tax Professionals or other IRS subscriptions. There also are social media platforms just for tax pros. Subscribe for quick alerts to keep up to date on events that affect authorized IRS e-file providers, transmitters and software developers.