What is an EFIN Number and why do tax professionals need one?

Understanding what an electronic filing identification number (EFIN) is

An EFIN (Electronic Filing Identification Number) is a six-digit code assigned by the IRS (Internal Revenue Service) to tax professionals and businesses who are authorized to e-file tax returns on behalf of clients.

EFIN numbers are important for tax professionals for several reasons, including…

• EFINs are mandatory for e-filing tax returns: without an EFIN, you cannot submit tax returns for clients electronically.
• The goal of EFIN numbers is to prevent tax fraud: The IRS tracks tax return submissions using EFIN numbers, which can help alert them to potential tax fraud before damage is done.
• Utilizing EFINs builds trust with clients: clients are more likely to trust tax professionals with IRS-authorized credentials that help ensure their financial safety.

EFIN requirements

Now that we understand what an EFIN Number is, let’s take a look at the rules and requirements related to EFINs.

Who is eligible for an EFIN?

Tax professionals who file federal tax returns with the IRS are eligible to apply for an EFIN number from the IRS. This can include individual or freelance tax preparers, accounting firms, or businesses filing payroll or information returns (such as Form W-2, Form 940, Form 941, or Form 1099).

There is no limit to when you can apply for an EFIN number – you can sign up for one with the IRS even if you have one client (or even zero clients). This can be a good idea for tax preparers who are just getting started, as using an EFIN can show potential clients that you are professional, serious about your work, and doing everything you can to protect client’s identities and tax information.

Who is required to have an EFIN?

Not every tax preparer is required to have an EFIN Number, however, the threshold for getting one is fairly low. Anyone filing more than 10 tax returns per year for clients is required to use an EFIN for electronically-filed tax returns, even if the other returns are paper filed.

In addition to this, businesses using professional tax software to e-file tax returns, such as ProSeries Professional, TaxSlayer Pro, Lacerte Tax, ProConnect Tax Online, or others, must use an EFIN number whenever they file taxes for clients.

Necessary documentation and prerequisites for an EFIN number

Before applying for an EFIN number, it’s important to make sure that you’re legally allowed to file taxes for clients professionally. This generally involves acquiring the designation of either CPA (Certified Professional Accountant) or EA (Enrolled Agent). Additionally, it’s important to get the following information together prior to applying:

• A PTIN number (Paid Tax Preparer Identification Number): this is a nine-digit identifier which is issued by the Internal Revenue Service to professional tax return preparers (and a legal requirement for all tax preparers who are get paid for these services)
• An EIN (Employer Identification Number): this number applies to tax preparers who run a business. This typically applies to businesses incorporated as an LLC, running as a partnership, a C-corp, or an S-corp.
• Personal details: collect information such as your SSN (Social Security Number), address, and contact information.
• Prior year’s tax return: if you don’t have a prior year’s tax return, then this doesn’t apply to you. If you do have one, then this information is used by the IRS to verify your identity.

Now that we know the details to have ready to go, next let’s cover obtaining the number.

How to get an EFIN

Next, let’s walk through how to apply for an EFIN and some tips and tricks to get the process right.

Steps to apply for an EFIN

Applying for an EFIN number is actually a fairly simple process. Simply follow the steps listed below.

1. 1. Collect the information listed above: collect your PTIN number, EIN (if applicable), SSN, address, contact information, and prior year tax return (if applicable).
   2. Sign in or create an IRS E-Services account: either log in or sign up for an IRS e-file account by clicking here.
   3. Fill out and submit your application: once you’ve logged in, fill out your application and click submit.
   4. Pass an IRS suitability check: once your application is complete, the IRS will complete what they call a “suitability check”, which could involve a credit check, tax compliance check, criminal background check, and a check for prior non-compliance with e-file requirements.
   5. Receive approval: once you’re approved, the IRS will send you an approval notice via mail or email.

It’s important to keep in mind that not everyone can get an EFIN number. Those with unpaid tax debts, felony convictions related to financial crimes, a fraudulent filing history, and past non-compliance with e-file requirements can all disqualify applicants from being approved. To learn more about the e-file application process, take a look at the IRS’s guide on how to become an authorized e-file provider.

How long does it take to get EFIN approval?

The IRS typically takes two to four weeks to evaluate your application and perform their suitability check, but the approval process can take up to 45 days during busy periods such as tax filing deadlines or the end of the year.

How much does an EFIN cost?

Good news – EFIN numbers are free! The IRS does not charge a fee to apply for or to receive an EFIN.

EFIN number lookup

While there is no public EFIN database to look up other tax filer’s EFIN numbers, it may come in handy to look up your own EFIN number from time to time. Verifying your EFIN can help ensure that there are no errors in IRS records, and it helps protect you and your clients against identity theft in the event that your EFIN gets stolen. Finally, it makes sure that you’re using the correct EFIN and there are no errors.

To do this, follow the steps below:

1. Log into your IRS e-services account
2. Navigate to the “E-File Application Status” page
3. Enter your details to retrieve your EFIN number

Alternatively, you can call the IRS e-help desk at 1-866-255-0654 to verify your EFIN number.