IRS launches enhanced E-Services.

Earlier this year, the IRS expanded the number of practitioners eligible to use its suite of E-Services. Previously, registration had been available only to those who filed at least 100 individual returns electronically. However, according to IR-2005-33, preparers that e-file any combination of at least five accepted individual and business tax returns in a calendar year can use the following new E-Services products:

* Disclosure authorization (DA);

* Electronic account resolution (EAR); and

* Transcript delivery system (TDS).

The IRS will be adding additional features to aid return preparers in resolving common problems timely.

E-Services Registration

Before using E-Services, tax advisers must pre-register online at www.irs.gov/taxpros/article/0,,id=10 9646,00.html. Registration entails personal as well as professional credential checks. Notification of final acceptance will be mailed to the tax adviser's home address.

After receiving the acceptance confirmation, practitioners must activate their account within 28 days. Once activated, the account is linked to the tax adviser's individual account and as a representative of his or her firm's clients. During subsequent logins to E-Services, tax advisers are asked to identify which organization or location they represent.

Expanded Products

DA: Tax advisers can now complete, view and modify a DA electronically by submitting online Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization. This feature expedites processing and issues online confirmation of acceptance and changes to filings that already exist in the Service's Central Authorization File.

EAR: EAR allows tax advisers to submit account inquires for individuals, as well as businesses (a previously filed Form 2848 is required to resolve all accounts). This service allows preparers to make five basic inquires (more will be added by the Service in the future):

1. Account inquiry: To request a transcript of a taxpayer's account or confirm payments of estimated taxes or refunds.

2. Complex refund inquiry: To determine the correct application of over-payments between tax years and, when refunds are transferred, between taxpayers.

3. Notice inquiry: To respond to IRS notices issued to clients. Responses are sent to a secure mailbox that allows an electronic dialogue between the tax adviser and the Service.

4. Installment agreement inquiry: To find out the current status of existing installment agreements (including the balance due) and the last payment amount and date posted.

5. Payroll inquiry: To deal with payroll tax issues and notices for late, missing or misapplied payroll tax deposits.

TDS: This service allows tax advisers with a power of attorney to request and receive account, wage and income, and return transcripts, and to verify nonfiling letters for individual taxpayers and account transcripts for business taxpayers. Tax advisers can also expedite question processing, with minimal intervention by the Service.

A new product--Record of Account--combines return and account transcripts. It permits a compete view of both the tax return data and its application, which will help practitioners to resolve open balance issues.

Other Services

Besides the expanded services noted above, E-Services encompass basic, professional-level customer services, including:

* Obtaining a preparer tax identification number (PTIN);

* Completing and submitting an e-file application; and

* Using taxpayer identification number (TIN) matching.

PTIN application: Tax advisers may choose to use a PTIN rather than a Social Security number to protect their personal identification information. A PTIN is accepted by the IRS and most state jurisdictions in place of a Social Security number.

Besides applying for a PTIN online, tax advisers can also look up a forgotten PTIN electronically and request a wallet card.

Online e-file application: Preparers can now register to e-file online. Once registered, they can use e-file to revise their electronic return originator information. Online registration circumvents the cumbersome methods of faxing or mailing Form 8633, Application to Participate in the IRS e-file Program. An incomplete application can be re-accessed for later editing, at which time it is both automatically updated and resubmitted. A new or updated application is required for new branch locations, as well as for changes in firm structure, mailing address or contact information.

A delegation-of-authority feature allows principals or other responsible firm members to delegate E-Services access to other employees.

TIN matching: TIN matching is a pre-filing service available to payers or other filers of information returns subject to backup withholding. Prior to submitting returns, authorized payers can compare up to 25 combinations of names and TINs against the IRS's database. There is also a bulk TIN matching service, which will match up to 100,000 TIN and name combinations. For the TIN matching services to work, the payer must be listed in the IRS payer account file, and the tax adviser's firm must be listed as having filed information returns in one of the past two years.

More Services to Come

Through E-Services, the IRS is offering efficient tools to busy practitioners and reducing the time they spend making phone calls and faxing documents. It plans to add additional points of access to E-Services as it modernizes its internal systems and implements security precautions.

Editor's note: Mr. Holub is the former chair of the AICPA Tax Division's Tax Practice Management Committee. Mr. Muirhead is the Chair of the AICPA Tax Division's Tax Practice Improvement Committee. Mr. Maida is a member of that Committee.

For more information about this column, contact Mr. Holub at [phone] or [e-mail], or Mr. Maida at [phone] or [e-mail]

Co-Editors:

Steven F. Holub, CPA 

Aidman, Piser & Co.

Tampa, FL

T. Chris Muirhead, CPA

Porter, Muirhead, Cornia & Howard

Casper, WY

Author:

Joseph C. Maida, CPA, Chartered

Ewing, NJ