NATP's Concerns with PPS Identity Verification
On January 3, the IRS revised the Internal Revenue Manual (IRM) to reflect changes to the IRM identity verification procedures. This change has caused security concerns for preparers. The new procedures require practitioners who call the IRS Practitioner Priority Service on behalf of a client to provide their own social security number, date of birth and CAF number to the IRS agent to verify identity.
Additionally, Form 2848, Power of Attorney, or Form 8821, Tax Information Authorization, now require you to inform your client if you are using an Intermediate Service Provider (ISP) to access client transcripts via the Transcript Delivery System. A box must be checked if you are using a third party. The IRS defines ISP as privately-owned companies that offer subscriptions to their software and/or services that the taxpayer’s authorized representative can use to retrieve, store and display tax return data (personal or business) instead of obtaining tax information directly from the IRS.
The following text is from a letter that NATP has submitted to IRS Chief, Communications & Liaison, Terry Lemons.
Issue
On January 3, 2018, changes were made to the Internal Revenue Manual Section 21.1.3.3 that now require tax practitioners to verify their identity by providing personal information such as their social security number and date of birth when contacting the IRS through the Practitioner Priority Service or any toll-free IRS telephone number.
For generations, tax practitioners have performed a vital function in our nation’s tax administration system by acting on behalf of taxpayers before the IRS. The IRS’ Practitioner Priority Service has long been the practitioner’s first point of contact when resolving account related matters. We request that the IRS keep open lines of communication while taking practical steps to insure the protection of taxpayer and tax practitioner identities.
The change to the IRM came without warning, not only to NATP and other IRS stakeholders, but to tax practitioners in general. That’s not to say that a change was unwarranted, however, advance notice of such changes are a key part to any successful implementation.
We understand that it is no longer “business as usual” when dealing with sensitive, personal information and that strong protocols are necessary to protect that information. However, asking tax professionals to provide their social security number and date of birth to an IRS assistor on the other end of the Practitioner Priority Service phone line, often with their client seated across the desk, is not in keeping with ongoing efforts to protect sensitive information.
This new procedure has raised concerns among our membership and the tax practitioner community collectively. We requested input from our membership and received hundreds of responses. At its core, the prevailing concern is verbally providing an individual’s social security number along with a date of birth as a means to verify identity. It is our mission to work collaboratively with the IRS by offering possible alternative solutions to providing sensitive and personally identifiable information over the phone.
Recommendations
Much of the feedback received from our members include alternatives to using their social security number and date of birth as identity verification indicators. Implementation of common business practices may achieve your objectives without compromising the personal information of tax practitioners. Some of these suggestions include:
- Ask the practitioner to verify the last four digits of their social security number rather than the entire number.
- Instead of verbally stating the social security number and date of birth, have the practitioner enter the numbers on the phone keypad.
- Randomly select certain numbers of the social security number. Ex.: Ask for the 1st, 3rd, 5th and 7th number.
- Ask the practitioner for their EA number or PTIN.
- Set up a secure link, PIN, or code using their cell phone number or email address. When the practitioner calls PPS they can text a code and the code is read back for verification purposes.
We welcome the opportunity to work with the IRS to develop alternatives to the recent procedural changes affecting those practitioners who represent clients before the IRS.
