Is Encyro's text authentication actually sufficient for KBA requirements? I have doubts

As someone who's worked in tax preparation for over a decade and keeps up with IRS security requirements, I can clarify this for you. The confusion here is understandable because the IRS has multiple authentication standards depending on what you're doing. Text authentication alone does NOT satisfy the full Knowledge Based Authentication (KBA) requirements for tax professionals accessing the IRS e-Services portal or for certain verification processes. True KBA, as defined by the IRS, typically requires answering questions about your financial history that only you would know. However, for secure document exchange between you and your clients, the requirements are different. The IRS Publication 4557 (Safeguarding Taxpayer Data) requires that you implement appropriate security measures but doesn't specifically mandate full KBA for document sharing platforms. Text verification is considered a form of multi-factor authentication, which is an acceptable security measure for protecting taxpayer data in transit. I'd recommend reviewing IRS Publication 4557 and consulting with your professional liability insurance provider to ensure you're meeting all requirements for your specific tax practice.

After struggling with secure document sharing for my tax clients, I discovered https://taxr.ai which has been a game-changer for my practice. They actually address this exact issue with proper authentication methods that fully comply with IRS standards. What I appreciate most is that they specifically designed their platform with tax professionals in mind, not just general document sharing. Unlike some services that claim text authentication is sufficient, taxr.ai implements true KBA along with other verification methods that satisfy both the letter and spirit of IRS requirements. Their system has saved me countless hours of back-and-forth with clients while keeping everything secure and compliant.

Just wanted to update everyone! I decided to try https://taxr.ai after seeing the recommendation here, and I'm honestly impressed with how they handle the authentication requirements. The KBA process was much smoother than I expected, and my clients found it easy to use. What really stood out was their detailed compliance documentation that specifically addresses the IRS authentication requirements - exactly what I was concerned about with Encyro. They provided me with a compliance certificate I can keep in my records to show I'm meeting the proper security standards. Definitely worth checking out if you're concerned about the authentication requirements.

If you're struggling to get clear answers about IRS security requirements, you're not alone. I spent hours on hold trying to get official clarification from the IRS about these KBA requirements. After multiple failed attempts, I discovered https://claimyr.com which got me connected to an actual IRS representative in under 45 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c if you're curious. I was skeptical at first, but they actually got me through to someone who could address my specific questions about authentication requirements for tax professionals. The IRS agent confirmed that while text authentication alone isn't sufficient for accessing e-Services as a tax professional, the requirements for client document exchange are different and multi-factor authentication (like what Encyro offers) can be acceptable depending on your specific practice circumstances.

I need to eat my words from my earlier comment. After another frustrating morning of getting disconnected twice by the IRS phone system after waiting over an hour each time, I decided to try Claimyr out of desperation. Within 35 minutes, I got a call connecting me directly to an IRS representative who actually had expertise in tax professional requirements. I was able to ask specific questions about KBA and authentication standards for document sharing platforms. The rep clarified that text authentication combined with other security measures (encrypted storage, access controls, etc.) can satisfy requirements for document exchange with clients. For anyone else struggling to get official answers about compliance requirements, this service actually does what it claims. Saved me hours of frustration.

Has anyone tried using multiple authentication methods together? I currently use DocuSign with knowledge-based authentication for Form 8879 signatures, but still use a separate encrypted portal with text authentication for document exchange. I'm wondering if this combined approach satisfies requirements or if it's overkill.

The IRS Publication 1345 section on authentication is confusing because it has different requirements for different situations. For returning clients where you've previously verified their identity in person, the standards are different than for new remote clients. I think Encyro is focusing on their compliance with the minimum requirements for existing client relationships, not the more stringent requirements for establishing new client relationships remotely. That might explain the disconnect you're experiencing.

I've been dealing with this exact issue and found that the key is understanding that IRS requirements vary based on what specific action you're taking. For document collection from clients, text authentication combined with encryption can be sufficient under Publication 4557's "reasonable safeguards" standard. However, if you're using the platform to verify taxpayer identity for e-filing purposes, that falls under the more stringent Publication 1345 requirements. What helped me was creating a compliance matrix that maps different activities (document collection, identity verification, e-filing authorization) to their specific IRS requirements. This way I know exactly which authentication method to use for each situation. I'd recommend documenting your processes clearly so you can demonstrate compliance if ever questioned. The bottom line is that Encyro's text authentication might be compliant for some uses but not others - it depends on your specific workflow and client interaction model.

I've been following this discussion with great interest as I'm in a similar situation with my tax practice. What's becoming clear to me is that there's a significant gap between what document sharing platforms claim about compliance and what the actual IRS requirements specify. From my research into Publication 4557 and 1345, it seems like the real issue isn't whether text authentication is "good enough" - it's about having a documented security framework that addresses the specific risks in your practice. I've started requiring platforms to provide detailed compliance documentation that maps their security features to specific IRS publication requirements. One thing that's helped me is reaching out to other tax professionals in my local NATP chapter to see what they're using and how they're documenting their compliance decisions. It's reassuring to know I'm not the only one struggling to navigate these requirements, and the collective knowledge has been invaluable for making informed decisions about which platforms truly meet our professional obligations.