Turn to e-Services for secure access to taxpayer information, key tools

By Gerard H. Schreiber Jr., CPA, and Marilyn Young, CPA, Ph.D.

Tax practitioners encountered a challenging environment this past tax season, as it came on the heels of a long government shutdown and was the first tax year greatly affected by the passage of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97 — as if the general complexities of tax practice do not put enough strain on practitioners. Time-saving tools that streamline communications with the IRS can be an important element of practice management since tax practice requires regular interaction with the IRS, and that interaction often requires long wait times on the phone. For practitioners accustomed to using the Practitioner Priority Service (PPS) phone line as their first source of contact with the IRS, the purpose of this column is to describe the benefits of e-Services.

The primary motivations for the IRS to create the e-Services platform are cost savings for the Service and convenience for taxpayers and practitioners. A fundamental part of communication with the IRS is authentication of the communication. The method of communication creates different costs for the Service. The IRS estimates that it expends between 65 cents and $65 to authenticate a hard copy letter or fax sent to the Service. For a phone call, the cost is $54, and for in-person meetings the cost is $89. The e-Services platform drops the cost to 20 cents.

Events like last year's government shutdown demonstrate the disruption to tax practice when the PPS is unavailable for return preparation and collection matters. This disruption is profound during busy season, but the complexities and uncertainties created from the TCJA, the proliferation of financial products sold to taxpayers, and the amount of paper associated with these financial products sent to taxpayers put more of an onus on practitioners to exercise proper due diligence in return preparation and advising taxpayers. When all of the information authentication requests are funneled through the one channel, the PPS, that channel can become overwhelmed during normal periods and grind to a halt in extraordinary circumstances. E-Services provides an alternative method of obtaining taxpayer information that is available 24 hours a day without the annoyance of long wait times or courtesy disconnects that occur in the PPS.

As the IRS has placed new restrictions on PPS for information that will be supplied to practitioners, all practitioners subject to Treasury Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10), who prefer to use only PPS will be required to register and transition to e-Services for some information requests. Accordingly, to make the most of this transition, practitioners can enhance practice management efficiency by becoming familiar with the full array of options within e-Services. The IRS has a dedicated page on its website to provide information on e-Services at irs.gov/e-services. Included on this webpage is a current telephone number to assist with inquiries and problems on e-Services.

The Secure Access registration process

Registration is necessary to use e-Services. To register, a user must provide the following information:

  • An active email address;
  • A Social Security number;
  • Filing status and address from the last-filed tax return;
  • A personal account number from a credit card, student loan, home mortgage loan, home-equity (second mortgage) loan, home-equity line of credit (HELOC), or car loan; and
  • A readily available mobile device that is either text-enabled or supports the IRS2Go app.

The required information can create some pitfalls in the registration process. These pitfalls can be avoided with the following recommendations:

  • The practitioner should use a phone associated with the practitioner's name so that the registration can be completed in one session. The use of a business mobile phone will make validation harder and will necessitate going to the IRS2Go app and requesting the activation code by mail.
  • If the practitioner has a credit freeze on credit records through Experian, it must be temporarily lifted before the registration process can be completed.
  • The credit card used in the registration process cannot be American Express, a debit card, or a corporate card issued in the practitioner's name by a firm, company, or organization.

At the beginning of the registration process, a one-time confirmation code will be sent to the email address the practitioner provided. This code is valid for 15 minutes. In addition, a one-time activation code is sent to the mobile phone number. This code is valid for 10 minutes. If registration is initiated without a mobile phone or with a phone not associated with the practitioner's name, then the code will be mailed to the physical address of record and will be valid for 30 days. A six-digit security code is generated each time the practitioner logs in to e-Services. The code is sent to the mobile phone that was validated during the registration process, and each code is valid for 10 minutes or may be generated through the IRS2Go app and be valid for 60 seconds.

The IRS has posted frequently asked questions (FAQs) on its website (available at www.irs.gov to assist practitioners in the registration process and getting started. The FAQ topics include:

  • Who Is Affected?
  • Getting Started;
  • The Exception Process; and
  • Common Errors.
Items available through e-Services

The Transcript Delivery System (TDS) is an IRS e-Services tool that allows authorized users to request and to view and print taxpayer transcript information online via a secure network. Circular 230 practitioners, including CPAs, are eligible to use the TDS. The following information can be obtained via TDS:

  • Account transcripts: This tool allows practitioners to monitor any adjustments made either by the taxpayer or the IRS after a return was filed. It also shows basic data, including marital status, type of return filed, adjusted gross income, and taxable income.
  • Tax return transcripts: This tool shows most line items from a tax return as it was originally filed, including any accompanying forms and schedules. This tool does not include any changes made after the original return was filed.
  • Record of account transcripts: This tool combines the return transcript and account transcript into one product.
  • Wage and income documents: Data reported on information returns, such as Forms W-2, Wage and Tax Statement, 1099 series, and 1098, Mortgage Interest Statement, are available using this tool.
  • Verification of nonfiling letters: This tool provides confirmation from the IRS that a taxpayer did not file a return for a given tax year.

For practitioners to use the TDS, it is necessary to have a properly executed Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, on file with the applicable Centralized Authorization File (CAF) unit to access taxpayer information. The TDS is available 24 hours a day with short, infrequent down times for system maintenance.

Other services

While TDS may be the most commonly used tool within e-Services, the following other services are available to practitioners:

  • TIN Matching: This service allows practitioners to validate taxpayer identification numbers (TINs) and name combinations prior to submitting information returns.
  • E-file Provider Services: This service allows practitioners to apply and participate in the e-filing of tax returns.
  • Affordable Care Act (ACA) Services: This service allows practitioners to apply for and participate in the e-filing of ACA information returns.
  • State Agency Services: This service allows approved state agencies to view and modify an existing state TDS application, view a taxpayer's account and return information, view and modify an existing state electronic filing identification number (EFIN) application, and generate state extract reports or view e-file participant data.
E-Services is the solution

Practitioners face ever-growing challenges in practice management and engagement with the IRS. Even without last year's government shutdown, budget cuts have caused Taxpayer Assistance Centers to be scaled back, along with other IRS services. These problems are exacerbated by due-diligence requirements for implementing complicated tax law changes and political uncertainty. For practitioners attempting to continue conventional means of interacting with the IRS, the growing challenges will push these traditional means to the breaking point. The remedy is to find an alternative method of obtaining information for due diligence and ­servicing client matters. That alternative is e-Services.  



Gerard H. Schreiber Jr., CPA, is with Schreiber & Schreiber in Metairie, La. Marilyn Young, CPA, Ph.D., is a professor of accounting at Belmont University in Nashville, Tenn. Mr. Schreiber and Prof. Young are members of the AICPA IRS Advocacy & Relations Committee. For more information about this ­column, contact thetaxadviser@aicpa.org.


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