Are you a CPA, tax professional, or enrolled agent looking to expand your expertise and services in the industry? If so, it’s time to consider starting a tax prep business and become an authorized e-file provider. Embracing the power of electronic filing not only streamlines your operations but also provides a convenient, efficient, and secure way for your clients to file their taxes. In this comprehensive guide, we’ll explore the steps and benefits of becoming an authorized e-file provider, providing you with valuable insights and actionable advice to elevate your tax preparation business to new heights. Stay with us as we delve into the world of e-filing and help you navigate the path to success.
3 Aspects of Starting a Tax Preparation Business
A tax preparation business can be rewarding in many ways. Solving problems is satisfying and piecing together puzzles is gratifying. But the best part of the job is helping people work out details that intimidate and overwhelm them.
Does this sound good to you? If so, you may have discovered the career of your dreams—but it’s not necessarily easy. It will take more than a passion for numbers to get your business up and running. This business requires a solid foundation of tax knowledge and training.
Before you open your doors to welcome new clients, there will be several hoops of approval to pass through to legitimize your credentials. Here are a few steps you’ll need to take.
Apply for an EFIN
Applying for an IRS Electronic Filing Identification Number (EFIN) will permit you to electronically file tax returns. Before you can actually file, you’ll need to apply to become an authorized e-file provider with the IRS. There are three phases to this process:
- Create an IRS E-services 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 account and fill out an online application to become an IRS e-file provider. Approval could 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 are approved by the IRS, they’ll send an acceptance letter informing you. It’ll include your EFIN.
Your next steps involve education. Not only will you need to learn all you can about tax preparation, but you’ll also want to learn about how to run a tax preparation business.
On one level, you’ll be doing what any competent businessperson does before they go into business. There’ll be market research and branding. You’ll learn about how to advertise and promote your services.
As you get your business off the ground, there are also actions specific to the tax industry that you need to take. Before you begin preparing returns remember to check your state’s licensing requirements.
Tax Office Operations
Unless you plan to go it alone and work from home as many tax preparers do, you’ll craft guidelines to run your business. Tax office policies and administrative procedures will be drawn up as will guidelines for IRS e-filing and IRS due diligence.
Clients and Services
You’ll meet all kinds of people through your business and service clients in a variety of ways. One thing to prepare for is the filing of Offers in Compromise (OIC). Learning how to provide this service will impact your business in big ways financially. However, dealing with the IRS can be a nightmare.
Don’t let IRS dealings take the fun out of your job. We at IRS Solutions found a way through the mire of tedious paperwork and hours spent waiting. With our software and mentorship program we’ll be by your side as you expand your business in ways you may not even realize. This system works for us and we know it’ll work for you.
Visit IRSSolutions.com to learn more.
