In a large mixing bowl, combine the softened cream cheese and butter, beating them together until smooth and well blended—this usually takes about 1-2 minutes with an electric mixer or vigorous hand mixing. The cream cheese should be at room temperature (around 70°F) to blend smoothly without lumps. I prefer Philadelphia brand cream cheese because it has the most consistent texture and blends seamlessly with the butter.

Add the sifted confectioners' sugar to the cream cheese mixture in two additions, stirring well after each addition to prevent lumps from forming. Once the sugar is mostly incorporated, add the vanilla extract and stir until the mixture is completely smooth and no streaks of sugar remain. The mixture should resemble moist sand or cookie dough at this point.

Gently fold the coconut into the sugar mixture using a spatula or wooden spoon, being careful not to overmix, which can make the candy tough. Fold until the coconut is evenly distributed throughout and the mixture is cohesive enough to hold together when squeezed. The texture should be like a thick, slightly moist dough that's ready to be shaped.

In a small bowl, combine the ground cinnamon and nutmeg together, stirring to distribute the nutmeg evenly throughout the cinnamon. I always use McCormick ground cinnamon for its superior color and flavor consistency. Set this aside for coating the candies.

Working with a small spoon or your hands (lightly oiled to prevent sticking), shape the coconut mixture into 1-inch balls and immediately roll each ball in the cinnamon-nutmeg mixture to coat all sides. Arrange the coated balls on a parchment-lined baking sheet in a single layer, leaving a little space between each one.

Refrigerate the candies for 10 minutes to firm them up slightly. After chilling, inspect each candy and apply a second, light coat of cinnamon-nutmeg mixture to any spots that look bare or need more color—this gives the Irish potatoes their characteristic rustic appearance with visible spice coating. Serve immediately or store in an airtight container in the refrigerator.