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What You Should Know About the IRS Business Tax Account

March 3rd, 2024

The Internal Revenue Service (IRS) has been accused of being a lot of things, but they’ve never been called technology-friendly.

But perhaps, with one of its latest initiatives, that’s about to change.

In the back half of 2023, the IRS soft-launched its business tax accounts, which will in time allow business taxpayers to manage much of their relationships and transactions with the IRS. More recently, the IRS expanded account access and added a number of features.

Amid the growing utility of this new IRS feature, business owners should start to take notice. The following is an overview of the IRS business tax account.

IRS Business Tax Accounts at Launch

The original launch of IRS business tax accounts in October 2023 was a pretty slim affair.

At the time, only unincorporated sole proprietors (with an active Employer Identification Number) could set up an account. Features were limited to viewing one’s business profile, managing unauthorized users, and requesting a tax check to determine whether your business is compliant.

Expansion to S Corps, Partnerships

In late December, the IRS widened availability of business tax accounts to individual partners of partnerships, as well as individual shareholders of S corporations. S corps and partnerships were granted access to viewing their business balance due and viewing their business name on file.

Sole proprietorships also gained a host of features, including viewing business tax records and any balance due, as well as registering for clean energy credits (if eligible). They can also view certain digital notices, including:

  • CP080: Notice of credited payments and/or other credits to a  tax account for the form and tax period shown on the notice, but the tax return remains outstanding.
  • CP136: Annual notification of Federal Tax Deposit (FTD) requirements (Forms: 941, 941-SS).
  • CP216F: Application for extension of time to file an employee plan return – approved.

On top of all this, all users can view PDFs of certain business tax transcripts. They include (SP = sole proprietorship, SC = S corporation, P = partnership):

What Businesses Need to Access the IRS’ Business Tax Account

Sole proprietors need an EIN to be eligible for the account. Individual partners and individual shareholders must file a business return with Schedule K-1 and have it processed by the IRS. They must have a K-1 for at least one year during 2019-2022, and they can only view info for the years they have a Schedule K-1 on file.

What’s Coming

The IRS says the platform will eventually provide a wide variety of “digital products and services,” including “access to viewing letters or notices, requesting tax transcripts, adding third parties for power of attorney or tax information authorization, and storing bank account information to manage tax payments.”

More simply: The IRS business tax account will be designed to save time for businesses that would otherwise need to call or send mail to the IRS.

Need Help With Your Business Taxes? Call the Pros

The IRS’s business tax accounts are a great self-service tool that can help businesses keep tabs on their comings and goings with the IRS. But that’s where the line ends — if you need tax services, from filing to planning, you’ll want to talk to a seasoned tax expert.

McManamon & Co.’s tax services for to small and midsize businesses includes federal, state and local tax obligations, as well as payroll taxes for both the business and business owners. We also offer compliance services, including preparing tax returns for businesses, individuals, estates and trusts.

Let us get you through the tax season scam-free. Call McManamon at 440.892.8900 or contact us online today.

Tags:  , , | Posted in McManamon & Co., small business, small business taxes, taxes