Launch a Tax Practice: Become an Authorized E File Provider

Are you a CPA, tax professional, or enrolled agent looking to establish yourself as a trusted local advisor? If so, it’s time to consider starting a tax prep business. The first step is to become an authorized e-file provider. Electronic filing is a powerful tool that streamlines operations while providing clients with a convenient, efficient, and secure way to file their taxes. In this comprehensive guide, we’ll explore the benefits of becoming an authorized e-file provider and walk you through the steps you need to take to get started on the path to success. You’ll take away valuable insights and actionable advice that will help you launch a practice, expand your offerings, and take your tax services business to new heights.

3 Steps to Launch Your Tax Preparation Practice

A tax preparation practice can be rewarding in many ways. At IRS Solutions®, we find solving problems satisfying and piecing together puzzles gratifying. But, for us, the best part of the job is helping people work out details that intimidate and overwhelm them.

Does that sound good to you, too? If so, you may have discovered the career of your dreams, but getting your business started will take more than a passion for numbers. A career as a tax professional requires training and a solid knowledge of the tax code. 

Before you open your doors to welcome new clients, you’ll need to legitimize your credentials and establish your practice. At a minimum, you’ll need to take these three steps before you take on your first case:

Become an Authorized E File Provider

Before you can file for others, you’ll need to apply to become an authorized e-file provider with the IRS. An IRS Electronic Filing Identification Number (EFIN) permits you to electronically file tax returns. There are three phases to this process:

• Create an IRS e-Services Account: Log in at https://www.irs.gov/e-services and create your account. You might have to sweat it out for several days as the IRS verifies your information and informs you of approval.
• Submit your Application: Upon approval you’ll be able to log into your new account and fill out an online application to become an authorized IRS e-file provider. Approval can take up to 45 days, so plan accordingly.
• Pass a Suitability Check: This may include a credit check, a tax compliance check, and a criminal background check. You’ll also be checked for prior non-compliance with the IRS.

Once you’ve completed the process and have been approved by the IRS, you’ll receive a letter informing you of your acceptance. That letter will include your EFIN. Keep it somewhere safe with other important identification data such as your Employer ID number (EIN) and IRS PIN request

Open Your Tax Office

Some tax preparers are solo practitioners who work out of their homes. Many others open an office-based practice and employ others to assist with client services. If you choose to go this route, you’ll need to:

1. Secure and furnish comfortable office space.
2. Hire qualified staff. Make sure that everyone has all the necessary licenses and registrations and verify that anyone you hire meets your state’s requirements for tax preparers.
3. Determine what services you’ll offer. Many accountants, Enrolled Agents, and other providers earn more and work less by specializing in the lucrative field of tax resolution. 
4. Craft and document office policies and administrative procedures, along with guidelines for IRS e-filing and IRS due diligence.
5. Create a website. You can do this yourself with one of the many “plug and play” options available, or you can hire a professional who will not only write and build your website, but also implement search engine optimization (SEO) to help it rank highly on results pages like Google.
6. Research and select tax resolution software, tax preparation software and any other technology you’ll require to keep your business running smoothly. You can choose a variety of single-purpose platforms, including one for Customer Relationship Management (CRM), email, client portal, and more – or you can look for an integrated platform like IRS Solutions that does it all. 
7. You’re ready to get started…throw a party and open the doors! 
   
   

Find, Engage, and Retain Clients 

After you’ve become an authorized IRS e file provider and opened your practice, bringing new tax prep business will require marketing. Begin by getting the word out through digital marketing and local options including print advertising, sponsorships, and networking. IRS Solutions members get help with these efforts in our exclusive Marketing Toolkit, which contains social media assets, info sheets, templates, and more.

Sometimes preparing a client’s taxes can reveal past issues that have gone unaddressed. Clients facing IRS difficulties are under great pressure. They need the help of a qualified professional and will be grateful to discover that you have chosen to provide tax resolution services. Moving these complex cases to an Offer in Compromise (OIC), Installment Agreement (IA), or Currently Not Collectible (CNC) status becomes simpler when you have the right software to streamline the process. Make sure that you opt for a platform that includes instant analysis and solution recommendations, bankruptcy discharge date calculator, form library, and a secure client portal for accountants to exchange information.

Finally, once you’ve completed tax prep or tax resolution services, IRS Advance Notice™ (IAN) is a new way to generate recurring passive income by retaining clients and transitioning them to ongoing monitoring. A critical feature of our audit and transcript monitoring software for accountants, IAN peers into the IRS system 24/7, watching for transcript changes including notification of impending audit. The system sends you an automated alert, often months before an official notification letter arrives in the mail, giving you time to prepare and mount a defense.

Ready to become an authorized e file provider and take the other steps necessary to launch a tax preparation practice and specialize in the lucrative field of tax resolution? Created by experienced colleagues who know what it takes, IRS Solutions is a tax pro’s best friend. Let’s talk about how we can help you. Schedule a demo today.