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The bill improves real-time EFIN validation to reduce rejected filings and better prevent fraud, but it creates privacy risks, implementation costs for vendors and the IRS, and transitional complexity during a phased rollout.
Taxpayers and tax preparers will get real-time confirmation that an EFIN is valid at filing, reducing rejected returns and processing delays.
Electronic filing software vendors and large providers can automate EFIN checks to better prevent fraud and block unauthorized preparers, helping protect taxpayer data.
State tax agencies and approved validators can perform real-time validations, enabling coordinated enforcement and faster detection of suspended or compromised credentials across jurisdictions.
Small software vendors and tax-preparation businesses must update systems to integrate real-time validation, imposing development and implementation costs and operational burdens.
The IRS will disclose certain validation data to external validators, creating privacy and data‑sharing risks for taxpayers if access controls or safeguards are inadequate.
Implementing and operating a secure, high-volume real-time validation system may raise IRS administrative costs that could be passed to taxpayers.
Based on analysis of 2 sections of legislative text.
Requires Treasury to build a real-time EFIN validation system and permits limited §6103 disclosures to approved validators to check EFINs.
Official title: To require validation of electronic filing identification numbers used to electronically file tax returns and other documents.
Introduced September 10, 2026 by Ron Estes · Last progress September 10, 2026
Requires the Treasury Secretary to build a real-time system that validates Electronic Filing Identification Numbers (EFINs) before they are first used and periodically afterward for electronic filing of federal tax returns and related documents. It authorizes limited disclosure of information under 26 U.S.C. § 6103 to allow approved validators — such as tax software providers, state tax agencies, and financial institutions (if approved) — to check EFINs, with timing rules for when disclosures and the validation requirement begin.