The IRS continues to change how businesses interact with federal tax accounts, placing more activity inside centralized online systems. For businesses, this shift affects not just how payments are made, but how easily those payments can be tracked, confirmed, and documented.
One of the most notable developments happened in early 2025 when the IRS expanded use of the Direct Pay and Business Tax Account systems to allow businesses to make payments and manage certain account activity through validated IRS online accounts. To access and manage business activity, first you must link your business to your existing IRS ID.me account or set up an account if you do not already have one.
While many businesses still rely on EFTPS, Direct Pay and Business Tax Accounts appear to be where the IRS is concentrating future development. That’s why we recommend becoming familiar with the system and setting up your business account as soon as possible, while there’s time to adjust processes and acclimate to the new system.
What Is the IRS Direct Pay System and How Does It Relate to IRS Business Tax Accounts?
The IRS Direct Pay system allows businesses to make federal tax payments directly from a U.S. bank account. You do not need an IRS business account to use Direct Pay, but setting up your business account will allow you to make payments directly through the account without going through the identity verification process each time.
Though they are not required, we still recommend our clients set up an IRS Business Tax Account in conjunction with using IRS Direct Pay. Prior to 2025, businesses were unable to link their personal ID.me accounts to their business, but now businesses can use their IRS ID.me accounts to access Direct Pay and other tools that are designed to provide greater visibility into your IRS account.
Depending on your account setup, businesses may be able to:
- Make federal tax payments
- View payment history
- Confirm payment status
- Access certain account-level information including records, notices and letters, and authorizations (available to Designated Officials).
This added transparency can be especially helpful when reconciling payments or responding to IRS notices. To see a full list of the types of business payments available through Direct Pay, visit the IRS website.
How to Set Up an IRS Account for Your Business
Setting up an IRS online account is a one-time process and should be completed well before any important tax deadlines. The set up process may require photo identification depending on if you have already verified your identity through ID.me or not.
At a high level, the process includes:
- Creating an IRS online account and completing identity verification
- Connecting the account to your business using your EIN and filing history
- Linking a U.S. bank account for payments
- Managing user access and permissions
- If you have an individual account with the IRS, you must use the same sign-in for your Business Tax Account.
We recommend getting your account set up as soon as possible. Occasionally, identity verification or account linking can take additional time. Before you begin account set up, make sure you qualify as a “Designated Official.” This role is not yet available for tax-exempt organizations or government entities. Note: for those businesses established and operating as Cooperatives, they should set up their IRS Direct Pay accounts as a C-Corporations.
Follow this link to create an account with the IRS and ID.me
Why We Recommend Setting It Up Now
EFTPS May Be De-Emphasized Over Time
While EFTPS remains active today, it is no longer the primary focus of new IRS system development. Most enhancements and future capabilities appear to be built around IRS online accounts.
The IRS is moving toward centralized, digital account management. Setting up your IRS account and Direct Pay now allows for a smoother transition as these systems continue to evolve.
More Than Just Payments
IRS Business Tax Accounts offer greater visibility than EFTPS, making it easier to confirm payments, review history, and address questions when they arise. In some cases, those who hold Designated Official accounts will have access to more tools and resources including access to notices and letters and authorization approval.
Improved Documentation
Payments made through Direct Pay generate immediate confirmations and digital records, which can simplify internal documentation and follow-up.
How This Fits Into Your Overall Process
Direct Pay and IRS Business Tax Account usage should align with your existing internal controls and approval processes like who initiates payments, who reviews confirmations, and how documentation is retained.
Establishing clear procedures helps reduce confusion and supports consistency which strengthens accountability over time, especially as systems and personnel change.
Don’t wait for the next deadline.
Setting up an IRS online account now can help your business stay prepared for future changes and gain better visibility into your federal tax activity.
