The IRS has reminded those participating in the electronic filing program about their responsibilities with regard to their EFIN number in Fact Sheet FS-2015-27.
The IRS has expressed concern about legitimate EFIN accounts being “hijacked” by those perpetrating tax refund fraud by filing fraudulent returns and has indicated that the agency expects EFIN holders to take actions to secure and monitor their accounts at IRS e-services.
The fact sheet reminds holders of the following facts:
- E-file application information should be updated within 30 days of any changes, such as individuals involved, addresses or telephone numbers. Failure to do so may result in the inactivation of a firm’s EFIN.
- The firm should insure proper individuals are listed as authorized on the EFIN form, listing only principals who are eligible to act for the entity in legal or tax matters. That includes:
- The proprietor for a sole proprietorship
- All greater than 5% partners for a partnership
- The President, Vice-President, Secretary and Treasurer for a corporation
- A responsible individual needs to be identified for the IRS to deal with regarding the EFIN
The fact sheet also reminds EFIN holders that they must insure they do not employ or contract with any person or firm that was denied participation in e-file, or has been suspended or expelled from the program.
The holder also need to monitor use of the EFIN number, looking for a sudden spike in the number of filed returns under the number that would suggest the number is being used by an unauthorized party. As the fact sheet states:
Help safeguard your EFIN. During the filing season, check on your EFIN status to ensure that your EFIN is not being used by others improperly. Your e-file application will help verify the volume received by the IRS which you can match to your records. The statistics are updated weekly. Should you see a higher volume than you transmitted, please contact the e-help Desk at 866-255-0654.
Of course, as a practical matter it’s more important to insure that the number does not actually fall into unauthorized hands to begin with, since if such misuse is detected it’s virtually certain the IRS will need to shut down the account as well as at least initially flag all returns filed with that number (which would likely include legitimate returns filed by the firm).