IRS Trying to Fix Issue that Kicked Users Off Transcript System

The IRS is trying to fix a problem that is incorrectly barring some practitioners from accessing a system that allows them to view their clients’ tax returns and account information online.

Practitioners generally have to electronically file tax returns to access the transcript delivery system, though there’s an exception that allows some to retrieve the data without having to meet the e-filing requirements. The IRS annually cleans up its list of authorized users, which can lead to mistakes, but the current problem seems to be more widespread, according to tax professionals.

The agency in an email alert late Thursday said it’s aware that permitted users may have lost access to the system and is working to restore that access. The agency urged users in need of immediate assistance to call the IRS. The agency didn’t return a request for additional comment.

Until the problem is resolved practitioners will have a harder time advising and representing taxpayers. The issue is exacerbated by the fact that the IRS is operating phone lines with limited staff because of the coronavirus pandemic, creating long wait times as practitioners attempt to resolve a range of issues, not just this latest one.

It’s “making a bad situation worse,” said Jeff Trinca, vice president of Van Scoyoc Associates in Washington and legislative counsel of the National Association of Enrolled Agents, whose members have been affected by the glitch.

Under the glitch, the IRS accidentally locked out some tax professionals who have access to the e-services transcript delivery system because they are CPAs, enrolled agents, or attorneys subject to Circular 230—regulations dictating the ethical conduct of tax professionals practicing before the IRS. Normally to access the system businesses and organizations have to have an active Electronic Filing Identification Number that they maintain by meeting certain electronic return filing thresholds. Circular 230 practitioners don’t have to meet the e-filing requirements.

The IRS each May will inactivate or revoke identification numbers to remove users who haven’t met the e-filing thresholds, but this year it’s kicked off some authorized users—primarily seeming to affect those who are exempt from the filing requirements.

Some had their numbers switched from “active” to “inactive,” while others had theirs dropped—a problem that’s much harder to rectify because it requires the practitioners to reapply for their identification numbers, which typically takes up to 45 days during normal operations.

Roger Nemeth, an enrolled agent and the president of the software company Audit Detective LLC, said his EFIN was canceled and he knows others who are in the same boat. In his case, the IRS reissued a new EFIN before he called about the problem.

If practitioners can’t use the transcript delivery system, they have to turn to other methods for accessing taxpayers’ information.

They can instruct clients to try to pull their own transcripts using the IRS’s Get Transcript tool, but very few people are able to access them that way because the security controls are so high, Nemeth said. Practitioners can also call the IRS and fax the agency forms to get permission to pull the transcripts—a less-than-ideal approach given the jammed-up phone lines.