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IRS to Transfer Services for Tax Professionals to, Despite Concerns About Company

Ruth Singleton
Published Date:
May 6, 2022

GettyImages-174879501 IRS Internal Revenue Service

The IRS plans to transfer its online services for tax professionals to, a third-party authentication service provider, this summer, in spite of objections to the company raised by members of Congress, Accounting Today reported. 

In an email sent to tax professionals Wednesday, the IRS announced that the following products and applications will be affected: 

• Affordable Care Act (ACA) for Transmitter Control Code (TCC); • Application Program Interface (API) Client ID Application
• e-File Applicaton;
• Information Returns (IR) for TCC;
• Income Verification Express Service (IVES) Application;
• State Applications (State EFIN and TDS State);
• TIN Matching, including Bulk and Interactive TIN Matching;
• Transcript Delivery System (TDS);
• Secure Object Repository (SOR);
• Modernized e-File (MeF); and
• ACA Information Returns (AIR). 

The IRS said  that while these applications won’t use until this summer, tax professionals can set up an account now using a Tax Pro Account. According to Accounting Today, the transition will occur over the summer to avoid interfering with the regular tax season that ended last month. 

Accounting Today reported that the IRS began using last November in order to authenticate taxpayers who wanted to create new online taxpayer accounts as a way to combat identity theft. However, privacy advocates began to object to the company requiring taxpayers to use selfies for facial recognition and submit government documents such as passports and driver’s licenses to the IRS. 

In February, the IRS announced that it would “transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts. The transition will occur over the coming weeks in order to prevent larger disruptions to taxpayers during filing season.” This announcement was made after Congressional Republicans proposed a bill that would prevent the IRS from enacting its planned facial recognition requirements for taxpayers to access tax records and other agency services. 

Last month, two members of Congress sent a letter to the company requesting documents and information as part of an investigation. They wrote, “Numerous reports have raised concerns about’s performance on government contracts and the effectiveness of its products and services.” 

Yet despite the February announcement and concerns raised by members of Congress, the IRS will continue to use the service, for now.

At a Senate oversight hearing Tuesday on the IRS budget, members of Congress asked IRS Commissioner Chuck Rettig about the IRS’s plans to transition from to the federal government’s own service, Accounting Today reported. Rettig responded that is not yet able to handle all the activity that the IRS is used to getting on its online services. He added that the IRS is working with to improve its capacity. 

“We were receiving about a million people  a week trying to create online accounts,” Rettig said. “The system we had before had about a 40 percent authentication rate, … but about 60 percent were not getting into the system and had to walk into a site or call in.” 

Because the IRS had a backlog of millions of tax returns to process last year, Rettig said, that was not practical. “With, the authentication rate is far in excess of 70 percent, both on the biometrics part, which is facial recognition, but taxpayers have the alternative to get online with a live person,” he said.  

He said that “can handle less than 30 transactions per second” noting, “We need about 1,500 transactions per second. We need a Level 2 authentication that once this person is in, this is the person.” 

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