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Helpful consumer information from the recent IRS Tax Forum Thumbnail

Helpful consumer information from the recent IRS Tax Forum

I spent a few days in Orlando at the end of August to attend the IRS’s annual “Tax Forum” conference. It’s a conference run by the IRS where tax practitioners can go to three days worth of different discussions and presentations.

The presenters are mostly IRS employees from within various departments of the organization, seasoned tax professionals within the industry, and senior members of various tax professional trade groups.

There were also staffed tabled set up by multiple departments within the IRS that gave attendees a chance to talk directly with IRS personnel about various aspects of taxes and IRS processes and procedures.

For as nerdy as this is going to sound, I thought it was a really good conference. I assume the information and content is largely the same year-to-year, so it’s not something I see me going to regularly. But I nonetheless see me going back again at some point in the future.

Anyway, while the conference was geared toward tax practitioners (e.g. people who do tax returns, represent taxpayers before the IRS and/or provide accounting services), I picked up some good bits of info that I think most consumers will find interesting and/or helpful. After all, the vast majority of people in this country have to interact with the IRS in some way, shape or form at some point in their lives, if not every year through the process of filing their tax returns.

With that said, here are the things I think you all may find some benefit and interest in. Some of these things are tangible to-dos, others are just random info I thought you might like:


Taxpayer Online Account

You might not be aware that you can create an online account with the IRS. When created and logged in, your IRS “Taxpayer Online Account” account lets you:

  • see any tax balances due
  • make one-time electronic payments
  • view or create payment plans
  • see up to five years of your payment history, including estimated payments made
  • change alert preferences, such as getting notices by e-mail instead of physical mail for certain IRS notices
  • request an IP PIN (more on that in the next point)
  • review and approve power of attorney requests from lawyers or other tax professionals
  • view the status of your submitted tax return
  • get electronic copies of information in “tax records” such as W-2s, 1099’s, etc.
  • get the status of your refund, and
  • chat with either a virtual assistant or live person (if the virtual assistant wasn’t able to properly assist)

I think these online accounts are huge step forward in the IRS’s ongoing initiative to digitize and streamline their processes and how people interact with the IRS. And I recommend everyone consider getting an online account considering the amount of helpful information they make available.

You can find out more about setting up an account at https://www.irs.gov/payments/online-account-for-individuals.

And to help ensure strong cybersecurity protocols around your online account, you’ll first have to create an ID.me account if you don’t already have one. ID.me accounts where they verify your identification as part of the account creation process. It’s a more secure form of login than just creating a username and password.

Once you have an ID.me account, that’s what will allow you to create and login to an IRS Taxpayer Online Account. And I believe that ID.me accounts are used elsewhere throughout certain other government websites and login processes, such as to login to your Social Security account.


IP PIN 

I mentioned IRS IP PINs a few months ago when I talked about cyber and data security best practices, so this might sound familiar to some of you.

An “identity protection” or “IP” PIN is a unique six-digit code you can get from the IRS to help minimize the chances of a fraudster filing a tax return as you.

Having an IP PIN helps ensure that only you can file a tax return under your SSN. If you request an IP PIN from the IRS, you won’t be able to file your tax return unless you include in your return what your IP PIN is. And, your IP PIN changes every year.

This means that if a bad actor were to try to file a fake tax return using your SSN, the return would get automatically rejected by the IRS if the return didn’t also have your correct unique IP PIN entered on the return. And, in theory, a fraudster wouldn’t be in possession of your IP PIN.

The IRS used to only issue IP PINs to people who were confirmed victims of identity theft. However, as of the last few years, anyone can now voluntarily get an IP PIN.

I believe the process of getting your first IP PIN may be such that the IRS will physically mail you that first year’s number. However, in subsequent years, you can get your new IP PIN each year simply by looking on your Online Taxpayer Account.

I personally got myself an IP PIN for the first time for the 2024 tax return year. So far, it all worked as planned; I received the letter last year informing me of my IP PIN for 2024. I first tried e-filing my return WITHOUT including my IP PIN, and my tax prep software notified me that the IRS immediately rejected it (which is good). And then once my IP PIN was added to my return, the e-filing worked as planned.

I haven’t yet tried to get my new 2025 IP PIN, but I’m assuming it should be easy, as I already have my own Taxpayer Online Account.

All in all, it thus far seems like the IP PIN process is pretty straightforward and worth the few extra steps of work.

You can find out more about getting an IP PIN here.


Document Upload Tool

Another big leap forward in the IRS trying to streamline and make processes and communications more efficient is their relatively new Document Upload Tool, or “DUT.”

Historically, any formal notices you received from the IRS have come via snail mail. For example, if the IRS’s computer matching system found that an item of income reported on your return didn’t match the corresponding 1099 that the IRS received a copy of, you’d get an auto-generated “CP2000” letter from the IRS alerting you of the discrepancy.

Normally, you’d have to mail back a response and any supporting documents, wait for the IRS to physically receive it, process it, respond to it, etc. Now, responses to CP2000 letters, and many other classes of IRS notices, can be replied to online via the DUT.

IRS notices that are eligible for DUT response will let you know at the top of the notice that you can reply via DUT. And I believe they may even have a QR code on them to help you more quickly get directly to DUT. Once in the DUT tool, you can scan or upload pictures of the relevant files or documents you want to send back as part of your response to the notice.

DUT allows uploads of files in .pdf, .jpg or .png formats. And while I don’t recall the exact limits on number of files or file sizes that can be submitted via the DUT, I recall in the presentation at the Tax Forum that the limits were rather large and won’t practically be a limiting factor for most people and responses.

Once files are uploaded to the DUT, you’ll receive an instant confirmation that the files were received. They’re not yet “processed,” as that will still require someone to look at them and reply accordingly. But the DUT upload process helps ensure your correspondence gets quickly and directly to the IRS, and not potentially lost on the floor of some mailroom.

For more information about the Document Upload Tool, you can look here.


Interactive Tax Assistant

The IRS’s Interactive Tax Assistant is a collection of different guided workflows to help answer common questions. It’s an interactive tool that offers step-by-step help to address certain questions like:

  • Do I need to file a tax return
  • Should I file an amended return
  • Who can I claim as a dependent
  • What’s my filing status
  • Am I required to make estimated payments
  • Is my pension or annuity taxable
  • Is my Roth distribution taxable
  • And a few dozen other similar questions

The Interactive Tax Assistant is NOT a chat feature with a live person on the other end. But I feel it’s still very helpful in a lot of scenarios, as its pre-made sets of questions will thoroughly address what you need to know and provide to ultimately get the answer to your question.

Depending on the question you’re looking up, you might need to gather and provide a lot of information. For example, if you click on the “Am I required to make estimated payments” question, you might be expecting it to just bluntly and quickly tell you yes or now. However, it’s going to need to ask you for all of your sources of income for the year, how much tax withholdings (if any) you will have made from sources like wages or Social Security, what your total tax obligation was last year, etc.

For better or worse, most of these seemingly simple and direct questions have a lot more info gathering required behind the scenes to give a proper answer. The Interactive Tax Assistant helps you step through all of the necessary data gathering belying each question.

While working through the guided questions and info gathering might take some time, it’s almost certainly going to be a lot faster than trying to call the IRS and presumably wait on hold for a few hours to try to get your answer.


Avoid Processing Delays

This one isn’t reference to a specific tool, but instead some general info to keep in mind to help prevent delays in your tax return getting processed:

1) E-file your return whenever possible. Try to avoid physically mailing paper tax returns to the IRS, as paper filing greatly increases processing times.

Generally speaking, most e-filed returns are accepted and acknowledged right when they’re submitted by whatever tax prep software you (or your tax return preparer) use to file the return. And then in most cases, your return is processed by computer within a few days or weeks.

Occasionally, returns get kicked out of the computer processing process and go into a queue for a real person to review. This can be due to some sort of error in the information on your return, because something on your return looked out of the ordinary and requires additional scrutiny (such as an unusually large reported charitable donation), or just because of your return getting randomly selected for additional review.

However, most of the time, e-filed returns get processed substantially faster than paper-filed returns, which can easily take up to a year to be received, reviewed and processed.

2) Another tip to help minimize processing delays is to verify all of your personal information is accurate. This seems obvious, but it’s worth reiterating. Most importantly, make sure your SSN and name are entered accurate on your return.

3) Whether you owe additional tax with your return, or are due a refund, it’s safer, quicker and more efficient to make or receive payment electronically instead of via paper check. And when providing your bank account info to the IRS, obviously ensure it’s accuracy, to help avoid delays or difficulties in processing your payment or refund.

Separately, as of the writing of this, it’s rumored that the IRS might soon be mandated to stop issuing paper checks. If that’s true and eventually goes into effect, it sounds like you’ll have no option but to do electronic refunds. So again, ensure your bank information is accurate!

4) Another way to help avoid processing delays of your return is to verify that you included all reported income on your return by logging into your Taxpayer Online Account and looking at your tax records on file with the IRS to see what forms and amounts of income were reported to the IRS.

The IRS gets copies of all W-2s and 1099s so they are aware of all your reported sources of income. If you intentionally or accidentally leave off the income from one of those sources, the IRS’s computer matching system will catch it, and your return will get hung up in processing, or the IRS will take it upon itself to send you a notice saying you underreported your income, and that you owe them additional tax. It would be best to avoid that in the first place by making sure your return accurately reports all income.


Non-Credentialed Preparers

This last one isn’t a tip or helpful tool, but I thought it was a bit of info you might find interesting.

Anytime someone does another person’s tax return for compensation, the preparer needs to have a PTIN from the IRS. A PTIN is a “preparer tax identification number,” and is a unique number issued by the IRS to each person who does tax returns for compensation. It's basically a way for the IRS to track who all is out there doing tax returns for money.

Or, at least it tracks people who are LEGALLY doing tax returns for money. There are sadly plenty of people out there who illegally do tax returns for pay, without ever notifying the IRS or getting a PTIN. 

HELPFUL TIP – if someone offers to do your tax return for pay, they MUST have a PTIN and they MUST put their name and PTIN on your return before it’s filed. 

While having a PTIN is required to do tax returns for compensation, there are actually no experience or education requirements to get a PTIN. The only requirements for someone to get a PTIN are that they are 18, have a valid SSN, are current on their own tax returns and tax payments, are not a convicted felon, and pay ~$20/yr to the IRS to get and maintain their PTIN.

You read that correctly; there are literally ZERO requirements around education, experience or training in tax to get a PTIN. Which ultimately means someone can be a paid tax return preparer with truly no prior experience or education.

In IRS lingo, people who have PTINs without any other formally recognized credentials are called “non-credentialed” preparers. On the other hand, people who have PTINs and are attorneys, CPAs, IRS Enrolled Agents or IRS Annual Filing Season Participant holders are referred to as “credentialed” preparers. These different credentials require having varying levels of testing, education and/or experience requirements.

I mention all of this as background to an interesting statistic I learned at the Tax Forum. As of last year, there were 822,000 active PTIN holders who engaged in preparing tax returns for compensation. Of those, about 55%, or 452,000, were non-credentialed preparers. In other words, more than half of paid tax return preparers were not attorneys, CPAs, Enrolled Agents or Annual Filing Season Participants.

What does this mean??? I’m not sure. On the surface, it means that the majority of people doing tax returns aren’t formally “credentialed.” But does that mean the 452,000 people doing returns with only a PTIN and no formal credentials don’t know what they’re doing??? Maybe, maybe not.

I suspect a lot of those 452,000 might be seasonal staffers at the large tax return places like H&R Block, where they undergo formal training on at least the basics of taxes and tax returns. And, many people’s tax returns are rather simple such that only a minimum level of training is required to be able to properly complete such returns.

However, I have to believe there are lots of paid tax return preparers out there who don’t have much, if any, experience or education in doing taxes. That doesn’t mean they’re intentionally doing anything wrong or underhanded. But I assume a lot of non-credentialed tax return preparers don’t know what they don’t know, are a lot of mistakes are getting made on a lot of people’s returns.

Don’t get me wrong, lots of CPAs, attorneys and Enrolled Agents make mistakes on returns, too. It happens. But I have to logically believe that, all else equal, preparers with no formal barrier to entry in doing tax returns are likely to make more errors than preparers with at least some minimum level of required education and/or experience.

I’m not really sure where I’m going with this point, other than to reiterate to you all that the bar to become a paid tax return preparer is concerningly low, in my opinion. So, do your diligence when choosing a tax return preparer. It’s one thing to hire someone with just a PTIN and no formal credentials if they work at a place like one of the large national tax prep services. It’s a very different thing to hire someone with just a PTIN and no formal credentials if they work out of a no name storefront that also sells lottery tickets and issues bail bonds. Buyer beware.


I hope you found this info helpful, or at least interesting. I know this isn’t specific to retirement planning or financial planning at all. But considering we all have to deal with tax returns and the IRS at some point in our lives – if not every year – I thought many of you might find these things useful.