What is an IRS business account?

The Internal Revenue Service (IRS) introduced its Business Tax Account in 2023. The portal provides business taxpayers with higher visibility to tax information online. The Business Tax Account is a secure, self-service online tool. It enables businesses to manage their tax obligations and access IRS account information specific to them. The second phase of the IRS online account rollout expanded eligibility to more business types. (More on that below.) The rollout includes new features to better serve business owners and partners as a one-stop shop for taxes.

Read on to learn more about who qualifies for an IRS Tax Account, how to create one, and what features are included to help streamline your business tax filing and financial management.

Who is eligible for an IRS Business Account?

When first launched, the IRS Business Tax Account (BTA) tool was only available to sole proprietors with an Employer Identification Number (EIN). The eligible entity types have since expanded with different levels of access.

Continue for a breakdown of the different business types, their eligibility requirements, and access level.

Sole proprietorships

• Sole proprietors who file taxes with an EIN are eligible for a BTA.
• As the owner, sole proprietors have full access to the features and information included in the IRS business account.
• Owners may also add employees to the account as Designated Users.
• Sole proprietors without an EIN may access their tax records by setting up an IRS individual online account.

Single-member LLCs

• Single-member limited liability company (SMLLC) who report business income on Form 1040 Schedule C or Schedule F do not currently have access to IRS business accounts.
• IRS may expand account access to include SMLLCs in the future.
• However, if an individual reports income on Form 1065 or Form 1120-S, they may have access as an individual partner or shareholder.

Partnership

• Individuals in small business partnerships with a Social Security number or an individual tax identification number (ITIN) and with a Schedule K-1 on file with the IRS from tax years 2012 to 2023 have limited access to the IRS Business Account.
• Individual partners can view business balances due, tax transcripts, and business names on file with a BTA.
• The IRS may introduce a full-access option for Designated Official (DO) roles for partnerships in the future.
  • A Designated Official is a president, VP, CEO, CFO, COO, secretary, treasurer, or a managing member of a business entity who is authorized to legally bind the entity.
  • A DO must also be a current employee who received a W-2 in the most recent tax year.
  • Currently only S corporations and C corporations have the option to grant an individuals DO access.

S Corporations

• Individual shareholders have the same access requirements as individual partners (see above).
• A Designated Official (DO) for an S Corporation is currently granted full access to the Business Tax Account.
  • A DO is a president, VP, CEO, CFO, COO, secretary, treasurer, or a managing member of a business entity who is authorized to legally bind the entity.
  • A DO must also be a current employee who received a W-2 in the most recent tax year.

C Corporations

• A Designated Official (DO), an authorized corporate officer or managing member of the corporation, has full access to the Business Tax Account.
  • A DO is a president, VP, CEO, CFO, COO, secretary, treasurer, or a managing member of a business entity who is authorized to legally bind the entity.
  • A DO must also be a current employee who received a W-2 in the most recent tax year.

If you’re forming a new business, you need to file and process a tax return before partners and shareholders are able to gain access to the account.

What can you do with an IRS Business Tax Account?

As mentioned above, your business structure and role in the business will determine your level of access with the BTA tool. The goal of the IRS business account tool is to simplify interactions for businesses, reduce paper-based communication, and streamline tax management.

Features of the tool allow business taxpayers to view:

• Tax balance due
• Payment history for transactions via:
  • Business Tax Account
  • Electronic Federal Tax Payment System (EFTPS)
  • Payroll processor payments, wire transfers, checks or money orders
  • Includes payments that were returned or denied
• Authorization requests from lenders
• Tax transcripts
• Digital copies of certain IRS notices
• Business name and address on file
• A tax compliance report

With an IRS BTA, you may also:

• Make electronic payments on any tax liability
• Set up future payments
• Cancel or modify scheduled payments
• Approve and reject lender tax transcript authorization requests on the IRS Income Verification Express Service (IVES)
• Download transcripts and notices
• Register for eligible clean energy credits
• Grant account access to business employees
• Request a tax compliance check

How to create an IRS Business Tax Account

To start using your Business Tax Account you’ll first need to gather all necessary tax information. This includes:

• SSN, ITIN, or EIN
• Entity-related federal tax documents
  • Ex. Schedule C, Form 1065, Form 1120-S, or Schedule K-1
• Business or mailing address listed on your most recent IRS record
• Photo ID for identity verificaiton

After you have have all of the necessary documents and records gathered, next you should activate the “My Business Login” with the IRS. To do this, create or log in to your ID.me profile and complete the activation process with the IRS.

Benefits of small business tax accounts

Small business tax accounts can help you maintain and track important financial and tax information related to your business all in one place. Other benefits of IRS Business Accounts include:

• Ensuring you and your business stay compliant with tax regulations
• Helping you keep your tax info organized and easily accessible
• Streamlining your tax filing process
• Helping you to avoid potential tax penalties
• Providing a centralized platform for tax-related activities

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Managing your small business tax obligations is one of many tasks you juggle as a small business owner. Get back to doing what you love and let our experts lighten your load, in person or virtually, year-round – as always – backed up by the Block Advisors guarantees. Our taxes, bookkeeping, payroll, and incorporation services are designed with small business owners like you in mind.

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This article is for informational purposes only and should not be construed as legal advice. You may want to seek the advice of an attorney to evaluate all relevant considerations.