Congress Advances EFIN Verification Act of 2026 to Combat Fraudulent Tax Return Filings

By Zaher Fallahi, Attorney At Law, CPA
Downtown Los Angeles & South Coast Plaza, Orange County
Nationwide Toll-Free: 1-877-687-7558

Congress is considering new bipartisan legislation intended to strengthen the security of electronically filed federal tax returns and reduce the misuse of stolen or compromised Electronic Filing Identification Numbers (“EFINs”).

H.R. 10334, the EFIN Verification Act of 2026, was introduced on September 10, 2026, by Representatives Ron Estes of Kansas and Jimmy Panetta of California. On September 16, 2026, the House Ways and Means Committee considered the legislation and approved it by a 40–0 vote.

What Is an EFIN?

An EFIN is the unique identification number issued by the IRS to an authorized person or entity for electronically filing tax returns and other documents on behalf of taxpayers.

The problem addressed by the legislation is relatively straightforward: an EFIN belonging to a legitimate tax professional or tax preparation firm may be stolen or compromised and then misused by a fraudulent filer.

According to a September 15, 2026, report in Accounting Today, the legislation is intended to prevent fraudulent returns from being submitted by requiring tax software to verify that an EFIN is active and authorized before enabling electronic filing.

Real-Time EFIN Verification

The proposed legislation would require the Treasury Department to establish an EFIN validation program. Before an EFIN could be used for electronic filing, it would have to be confirmed as active and authorized.

Significantly, tax preparation software would be required to validate the EFIN before allowing a return or other covered document to be electronically filed. If the EFIN cannot be validated, the software could not permit the electronic filing.

The legislation contemplates a real-time verification system capable of immediately determining whether an EFIN is:

• active and authorized;
• suspended;
• revoked;
• compromised; or
• otherwise, ineligible.

The system would also be designed to accommodate secure, automated, high-volume verification requests from tax preparation software providers.

In practical terms, the proposal seeks to move an important fraud-control mechanism to the front end of the electronic filing process, rather than discovering misuse only after a fraudulent return has entered the tax system.

An Interesting Connection to Loving v. IRS

The legislation also provides an interesting historical perspective on the federal regulation of tax return preparers.

In Loving v. IRS, 742 F.3d 1013 (D.C. Cir. 2014), the D.C. Circuit rejected an IRS attempt to impose a broader regulatory regime on paid tax return preparers—including testing and continuing-education requirements—because the court concluded that the authority granted to Treasury under 31 U.S.C. § 330 did not extend that far.

Importantly, Loving did not hold that greater oversight of tax return preparers would necessarily be bad policy. The court instead concluded that such an expansion of regulatory authority was a matter for Congress and the President through legislation, rather than for the IRS to accomplish through an expansive interpretation of an existing statute.

The EFIN Verification Act presents a different issue and should not be characterized as overturning or conflicting with Loving. Rather, it illustrates the legislative route contemplated in Loving: Congress may expressly provide Treasury and the IRS with additional statutory tools when lawmakers determine that additional safeguards are appropriate.

Why EFIN Security Matters to Taxpayers and Tax Professionals

Identity theft and fraudulent tax filings can create substantial problems for innocent taxpayers and legitimate tax professionals. An EFIN is not merely an administrative number; it is an important credential in the IRS electronic filing system.

The proposed verification system is designed to determine, at the point of filing, whether the credential being used remains legitimate. Accounting Today reports that supporters of the legislation view the existing inability to authenticate EFINs adequately as a security gap that can permit stolen numbers to be misused by online scammers.

For tax professionals, the legislation is also a reminder that EFINs, PTINs, tax software credentials, client information, and other electronic filing credentials should be treated as highly sensitive information.

The Bill Is Not Yet Law

As of September 17, 2026, the EFIN Verification Act has advanced through the House Ways and Means Committee, but it has not become law. The Committee approved H.R. 10334 on September 16.

Accordingly, taxpayers and tax professionals should distinguish between the bill’s proposed requirements and existing law.

If ultimately enacted, the legislation generally provides for implementation after a two-year period. The introduced version states that its principal requirements would apply to returns and other documents for taxable years beginning after the date that is two years after enactment.

Zaher Fallahi, Attorney At Law, CPA
Tax Attorney & Certified Public Accountant
Downtown Los Angeles | South Coast Plaza, Orange County
Nationwide Toll-Free: 1-877-687-7558This article is intended for general educational and informational purposes only and does not constitute legal or tax advice. The legislation discussed above remains subject to amendment and further congressional action.