For tax professionals who e-file client returns, the electronic filing identification number (EFIN) is a non-negotiable requirement for e-filing. Issued by the IRS, the EFIN authorizes individuals and firms to transmit electronic returns securely. Without one, you cannot legally e-file for clients.

Unfortunately, because of its importance, EFIN scams have become a serious problem. Cybercriminals target tax professionals by attempting to steal EFINs and use them to file fraudulent returns.

Why is an EFIN important?

An IRS EFIN is a unique identifier assigned to approved participants in the IRS e-file program. It allows the IRS to track electronically filed tax returns to the authorized provider.

Think of your EFIN as a digital license to operate in the e-file system. Every return you transmit is linked to your EFIN, making it a critical tool in verifying that returns come from trusted professionals. Without it, your firm is unable to electronically file tax returns for clients.

Who needs an EFIN?

The EFIN requirement applies to:

• Tax professionals and firms that prepare and file electronic returns on behalf of clients
• Organizations transmitting returns as part of a tax preparation service

Exceptions:

• Individual taxpayers filing their own returns using tax software or the IRS Free File program do not need an EFIN.
• Software developers and transmitters may use a different identifier, such as an electronic transmitter identification number (ETIN). But if you prepare and file returns directly for clients, you must have your own electronic filing identification number (EFIN).

How to apply for an EFIN

The IRS provides a clear process for obtaining your EFIN through its e-Services platform. Here’s an overview:

1. Create an IRS e-Services account

   Register online and verify your identity using personal and financial information.

2. Submit an e-File application

   Log into e-Services and complete the IRS e-file application. You must include details about your firm, business principals and responsible officials.

3. Pass IRS background and suitability checks

   The IRS conducts reviews for all principals and responsible officials, including fingerprinting and tax compliance checks.

4. Receive your EFIN

   Once approved, the IRS will assign your EFIN. The process usually takes up to 45 days, so apply before tax season.

Tip: To avoid delays, ensure all information provided is accurate and up to date.

Maintaining your EFIN

Having an EFIN is just the first step; keeping it active and compliant is equally essential.

• Update your application: If you change your business address, ownership or staff, update your e-file application promptly. The IRS sometimes inactivates EFINs if firms fail to update their application within 30 days of changes.
• Stay compliant: IRS rules require accurate return filing, safeguarding taxpayer information and following e-file procedures. Violations can lead to suspension or revocation of your EFIN.
• Check periodically: EFINs don’t expire annually like PTINs; the IRS conducts periodic suitability checks to ensure ongoing compliance. Keeping your information current ensures you remain in good standing.

How to prevent fraud and scams

Because EFINs are so valuable, they are a significant target for cybercriminals. Stolen EFINs are often used to commit tax refund fraud. Protecting your EFIN is a top priority.

1. Monitor EFIN activity

Regularly log into your IRS e-Services account and check your EFIN records. If the number of returns filed under your EFIN is higher than what you’ve submitted, it could signal fraudulent activity.

2. Protect your IRS e-Services login

• Use strong, unique passwords
• Enable multi-factor authentication (MFA)
• Limit access to authorized staff only

3. Strengthen cybersecurity

• Install and update antivirus and firewall protection
• Encrypt sensitive client data
• Apply security patches to all tax software and operating systems
• Restrict data access for employees to a need-to-know basis

4. Watch out for IRS phishing scams

Fraudsters often impersonate the IRS to trick tax pros into giving away login credentials. Remember:

• The IRS will never email or call you asking for your EFIN or password.
• Be wary of unsolicited links and attachments.
• Report suspicious activity to the IRS immediately.

5. Act quickly if your EFIN is compromised

If you believe your EFIN has been stolen:

• Contact the IRS e-Help Desk right away.
• Notify your local IRS stakeholder liaison.
• Review and strengthen your firm’s security policies to prevent further breaches.

Your IRS EFIN is more than just a number; it’s your professional key to e-filing client tax returns. Without it, you cannot participate in the IRS e-file program. Because of its importance, however, scammers are always looking for ways to steal or misuse it. Staying proactive helps you meet IRS compliance requirements and safeguards your reputation as a trusted tax professional.