IRS beefs up sign-in process for qualified intermediaries

Accounting

The Internal Revenue Service is updating its login procedures for several of its online applications to improve their security.

The IRS said in an email Monday that it plans to soon transition the Qualified Intermediary, Withholding Foreign Partnership, Withholding Foreign Trust Application and Account Management System (QAAMS) to a new sign-in system that will require new users to register or sign in with ID.me, the current IRS credential service provider. Existing users won’t need to take any action at this time, however. 

“QAAMS users with an active IRS username may continue to sign in after the transition until further notice,” said the IRS. “In the future, existing users will be required to use the new sign-in system to access QAAMS.” 

Qualified intermediaries (QIs) include foreign banks and other financial institutions that need to file information with the IRS or the tax authority in their home country to report on the assets and transactions of U.S. taxpayers with foreign bank accounts. The IRS set up a system for qualified intermediaries as part of the implementation of the Foreign Account Tax Compliance Act of 2010, also known as FATCA. A QI also includes any foreign intermediary (or foreign branch of a U.S. intermediary) that has entered into a qualified intermediary withholding agreement with the IRS.  

The IRS headquarters in Washington
The IRS headquarters in Washington.

Andrew Harrer/Bloomberg

New users will be required to create an ID.me account prior to accessing QAAMS. The account creation process will include verifying an email address, creating a password, and setting up multi-factor authentication to secure their account. ID.me will provide several ways in which an applicant can obtain a multi-factor authentication code, including obtaining a code by receiving a phone call or text message. Users will then consent for ID.me to share their email address with the IRS before accessing QAAMS.

The IRS has been migrating its e-Services sign-in processes to the third-party ID.me identity verification system this past year as a way to improve taxpayer and tax professional authentication (see story). However, the new service has also come under fire from some privacy advocates and some lawmakers in Congress this year over its facial recognition features, which were seen by some as a violation of user privacy before the IRS relaxed the requirement. The IRS has been looking to transition to the Login.gov service that is also used by the federal government, but IRS Commissioner Chuck Rettig has testified it has capacity limitations that continue to favor use of ID.me.

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