Ready to level up your tax prep game? Today, we’re diving into the nitty-gritty of getting your Electronic Filing Identification Number (EFIN) from the IRS. It’s a crucial piece of the puzzle for any tax preparer looking to streamline their process and serve clients efficiently. If you’re ready to start a tax preparation business, follow along, and we’ll explain how to get an EFIN.

What’s an EFIN Anyway?

Let’s start with the basics. EFIN stands for Electronic Filing Identification Number. It’s a unique identifier issued by the IRS that allows you to electronically submit tax returns. With an EFIN you can prepare and submit tax returns electronically and straight to the IRS instead of through a middleman. This sounds great in theory, but there can be some hurdles to overcome before you can and more importantly SHOULD obtain your EFIN.

Let’s take a look:

Step 1: Educate Yourself

Before you even think about getting an EFIN, learn taxes and learn them well. When you submit your returns straight to the IRS there is no one to review them and make sure they are accurate but yourself. You can learn how to get an EFIN, but should you?

Do you really know all those tax forms and what they mean or do you just know how to plug and play the numbers to get a big return for your client? This isn’t a game. It’s the US government and the consequences of bungling it are very high.

Always make sure you know what you are doing. Take some classes and learn tax law. The stakes are much higher in the tax game when you have an EFIN. Meaning if you make an error you could be looking at large fines and having your EFIN revoked. If the IRS determines that the error was intentional, read fraudulent, then you could be looking at federal prison in addition to fines. It’s not worth it to play around so make sure you really know the stakes and you know taxes before taking that leap.

Additionally, consider the potential benefits and risks of revenue sharing, which can impact your business model and compliance with tax regulations.

Step 2: Prepare Your Paperwork

Before you can even think about getting your hands on an EFIN, you’ll need to gather some paperwork. The first item on your checklist? IRS Form 8633, also known as the Application to Participate in the IRS e-file Program. This form is your gateway to e-filing. It collects essential information about you and your tax preparation business, so make sure to fill it out carefully and accurately.

Step 3: Get Your PTIN in Order

You should by this point already have a PTIN if you are looking up how to get an EFIN, but in case you missed that step make sure you file for your Preparer Tax Identification Number (PTIN). What is a PTIN?

Your PTIN is basically a number assigned by the IRS to protect your identity and is required for anyone who prepares or assists in preparing federal tax returns for compensation. Don’t have one yet? No problem! You can easily apply for your PTIN online through the IRS website. Costs a few bucks and a few minutes of your time but is required before you can go forward with your EFIN application.

Step 4: Submit Your Application

With your paperwork in hand and your PTIN at the ready, it’s time to submit your EFIN application to the IRS. Once they receive your application, the IRS will conduct a thorough review to ensure you meet all the requirements.

This process typically takes around 45 days, but if they’re backed up (which they usually are), it can take up to 3-6 months.

Common Roadblocks and How to Overcome Them

Now, let’s address the elephant in the room: what if you hit a snag in the EFIN acquisition process? 

Don’t fret, you’re not alone. There are a few common roadblocks that tax preparers may encounter along the way.

One potential hurdle is a history of criminal convictions related to tax matters. The IRS takes compliance and integrity seriously, so any past legal issues in this area may impact your eligibility for an EFIN. Similarly, unresolved tax debts or unfiled tax returns could throw a wrench in your plans. It’s crucial to address these issues promptly and transparently in your application.

Additionally, if you’re wondering how to become a tax service bureau, there are specific requirements and steps you’ll need to follow, including meeting certain compliance standards and obtaining necessary certifications.

Taxx Savage’s EFIN Sharing Program

Don’t worry, we’ve got your back. Even if you stumble in obtaining your EFIN, we offer an EFIN sharing program to help you get back on track. This program allows PTIN holders to use our EFIN temporarily until they obtain their own and even operate their own tax offices with preparers working underneath them. We’re all about supporting our fellow tax preparers on their journey to success.

Ready, Set, E-File!

In conclusion, obtaining your EFIN is a crucial step in your journey as a tax preparer. By following the steps outlined above and navigating any potential roadblocks with confidence, you’ll be well on your way to e-filing success. And remember, Taxx Savage is here to support you every step of the way.