You’ve invested time, training and money in software to prepare your clients’ federal tax returns on the computer. Now it’s time to take the next step and send those returns electronically to the IRS.

IRS e-file is the most accurate, secure way to file returns today. In fact, the majority of returns (52 percent) in 2005 were received electronically. Why?

Because more and more tax professionals (and taxpayers) are seeing the significant benefits of using IRS electronic services. By becoming an authorized e-file provider and using either software or a third party transmitter, tax professionals gain considerable client satisfaction and reduce IRS problems in the long run. In addition, taxpayers receive their refund faster (especially if they choose Direct Deposit) and fewer errors are encountered in processing their returns.

Beyond Filing
Through enhancements to its products and web site, the IRS is making it easier than ever for tax professionals to
e-file and take care of clients’ taxes electronically. Almost all IRS forms can now be filed and paid electronically for both individuals and businesses. But there’s more to the electronic IRS than just filing.

For Tax Professionals
For tax professionals, the IRS provides a full suite of web-based products called e-services available at online. The development and implementation of e-services has been in progress for several years, and improvements will continue to expand the services over the next year.

These basic services are designed to help tax professionals handle the major components of tax preparation and filing and improve the speed with which the IRS responds:

Registration: Anyone who wishes to use the e-services products must first register. Once the tax professional has registered, they will receive a confirmation code via mail within 10-14 days to their home address. Next, they will login to e-services, confirm the registration and begin using the services.

e-file Application: The on-line e-file Application replaces the paper process for submitting Form 8633, Application to Participate in the IRS e-file Program. Applications can be maintained and updated electronically and a new delegation of authority feature allows principals or responsible officials of the firm/organization to delegate e-services products to their employees.

Preparer Tax Identification Number (PTIN): A tax professional may choose to use a PTIN instead of his or her own SSN on returns prepared for clients. The PTIN Application allows a preparer to apply for and receive a PTIN online, or they also have the option of looking up a forgotten PTIN. The preparer can request a PTIN card be sent to them. This process used to take weeks to complete, but can now be completed in seconds.

Taxpayer Identification Number Matching
(TIN Matching):TIN Matching is limited to payers who file any of the following six information returns: 1099-B, INT (interest), DIV (dividend), PATR (patronage), OID (original issue discount), MISC (miscellaneous). In order to participate in TIN Matching, payers must be listed in the IRS Payer Account File (PAF) database.

Beyond these basic e-services, tax professionals who are active participants in the IRS e-file program and e-file more than five individual income tax returns in a season are eligible to use the following incentive programs:

Disclosure Authorization (DA): Allows third parties to submit Forms 2848, Power of Attorney, and Form 8821, Tax Information Authorization, online. Tax professionals will receive immediate verification that the POA has posted to the IRS Centralized Authorization File (CAF File) and can begin using other incentive products. However, tax professionals must have a signed POA in their business files prior to submitting the form electronically. Tax professionals can view all previous authorizations on file, and update the information online.

Transcript Delivery System (TDS): TDS enables the authorized practitioner to request tax transcripts and account information on their clients’ accounts.

Electronic Accounts Resolution (EAR): EAR enables the authorized third party to submit an inquiry electronically to the IRS, 24 hours a day, seven days a week. The biggest advantage to using EAR is that the inquiry will remain with the same IRS Customer Service Representative from beginning to end.

The benefit to tax professionals who use e-services is the tremendous increase in customer satisfaction with IRS problem resolution. The tax professional has access to information in seconds, rather than days or weeks, thus resolving client issues much more quickly.

And More…
And there’s more. Through the electronic IRS, tax professionals can…

• Obtain an EIN via the Internet EIN program
• Submit information returns through the FIRE program
• Review current and past IRS documents in the Electronic Reading Room
• Access phone representatives through e-Help Services
• Subscribe to a variety of electronic alerts and newsletters
• Check on client refunds

The IRS has its priorities set on increasing the number of electronic options for its customers. The goal is to provide easier access to the IRS and give tax professionals the ability to do more transactions online. Through its modernization efforts and new online product development, they are on their way to providing an all-electronic IRS that tax professionals will find very valuable.

Tax professionals can register for e-services online.

Take the next step…register for e-services if you haven’t already done so, and send your clients’ tax returns electronically this year.

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