EFIN Verification Act

Summary#

This bill requires that an electronic filing identification number (EFIN) be checked and confirmed before it can be used to electronically file federal tax returns or other documents with the Secretary of the Treasury. The Secretary must create a validation program that includes a real-time system. That system must give immediate confirmation about an EFIN’s status, including whether it is active and authorized or suspended, revoked, compromised, or ineligible. Electronic filing software must require validation through that system and must not allow filing unless the EFIN is validated. The bill also allows the Secretary to share information from the validation program with certain "specified validators" (for example, software providers, State tax agencies, and financial institutions) if the Secretary approves them. The bill amends tax information disclosure rules to permit those disclosures.

What it means for you#

• Tax preparers and companies that file returns electronically must make sure the EFIN used is validated before filing. Software that files returns must include a validation step and block filing if validation fails.
• Entities such as software providers, State tax agencies, and banks could be allowed to access the validation system if the Secretary approves them as "specified validators."
• The rule requiring validation applies to returns and documents for taxable years beginning after two years from the date the bill is enacted. The change allowing disclosures to specified validators also takes effect for disclosures made after two years from enactment.

Expenses#

No publicly available information.

Proponents' View#

The bill would require real-time confirmation of EFIN status, provide a secure automated system for high-volume checks, and allow approved validators to verify EFINs. Supporters would say this helps ensure only active, authorized EFINs are used to file returns.

Opponents' View#

No publicly available information.