The Internal Revenue Service (IRS) recently launched the second phase of its online self-service tool for businesses, enhancing business tax account capabilities and broadening eligible entity types. The move is part of the agency’s ongoing modernization effort aimed at streamlining processes for taxpayers.
Under the updated service, individual partners of partnerships and individual shareholders of S corporation businesses have become eligible for a business tax account, joining sole proprietors who were already eligible. The new business tax account is part of the IRS’s service improvement initiative, an effort that aligns with last year’s Inflation Reduction Act (IRA) and the multi-year Strategic Operating Plan released earlier this year.
“This next step in the evolution of the Business Tax Account will help these businesses download transcripts and other features,” said IRS Commissioner, Danny Werfel. “Ultimately, these new online options will help make interactions easier for businesses while reducing paper-based processes and the need to call the IRS.”
The enhanced service allows users to download PDFs of business tax transcripts. For sole proprietors, S corporations, and partnerships, this includes a variety of forms such as 940, 941, 943, 944, and 945 among others. Sole proprietors can also view certain notices, including reminders about unfiled returns and notifications about Federal Tax Deposit requirements.
Access to the business tax account information is granted to individual partners and shareholders once they have submitted a business return with the Schedule K-1 and it has been processed by the IRS. They must have a Schedule K-1 for at least one year during the 2019-2022 period on file and will only be able to view information for the year(s) they have a Schedule K-1 on file. New businesses will gain access after their business return is submitted, processed, and on file with the IRS.
Sole proprietors with an Employer Identification Number (EIN) can access their business tax account. Those who have already set up an individual account under their Social Security Number or Individual Taxpayer Identification Number, and have an EIN linked to their SSN or ITIN, can use their existing login to access their business tax account.
The IRS envisions the business tax account as a comprehensive application offering a suite of digital products and services. This includes 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.
By enhancing its online service tools, the IRS aims to reduce the burden on taxpayers who would otherwise need to call or mail the agency, streamlining tax management for businesses.
To set up a new business tax account, or for more information about this app, visit IRS.gov/businessaccount.
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