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Business Tax

IRS Rolls Out Online Power of Attorney and Tax Information Authorization Forms

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

In a News Release, IRS has announced that it has rolled out a new online option that will help tax professionals remotely obtain signatures from individual and business clients and submit authorization forms electronically.

Background.

Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization, are two forms that allow taxpayers to authorize IRS to disclose their tax information to third parties, such as, tax professionals. Form 2848 is a taxpayer’s written authorization appointing an eligible individual to represent the taxpayer before IRS, including performing certain acts on the taxpayer’s behalf. It also authorizes the representative to receive related confidential tax information of the taxpayer from IRS. Form 8821 is a taxpayer’s written authorization designating a third party to receive and view the taxpayer’s information. (IR 2021-20)

Online forms.

Tax professionals can now submit Forms 2848 and 8821 online, by following the instructions under “Submit Forms 2848 and 8821 Online” on IRS.gov/taxpro.

Tax professionals must have a Secure Access account, including a current username and password, or create an account in advance of submitting an online authorization form. For addition information about Secure Access, see IRS’s Secure Access webpage.

The taxpayer and the tax professional must sign Form 2848. If the tax professional uses the new online option, the signatures on the forms can be handwritten or electronic. Form 8821 needs only the taxpayer’s signature. If using the new online option, the taxpayer’s signature can be handwritten or electronic.

If the tax professional uses the electronic signature option for a new client, the tax professional must first authenticate the client’s identity. For details on this process, see FAQs: online submission of power of attorney and tax information authorization forms.

Tax professionals may also use the “Submit Forms 2848 and 8821 Online” to withdraw previous authorizations. However, the new online option cannot be used to ask questions or address other issues.

The process to mail or fax authorization forms to IRS is still available. Signatures on mailed or faxed forms must be handwritten. Electronic signatures are not allowed.

Most Forms 2848 and 8821 are recorded on IRS’s Centralized Authorization File (CAF). Authorization forms uploaded through this tool will be worked on a first-in, first-out basis along with mailed or faxed forms.

The new online option negates the need for specific equipment, e.g., fax machines, scanners.

This summer, IRS plans to launch the Tax Pro Account. Its initial functionality will allow tax professionals to initiate a third-party authorization on IRS.gov and send it to a client’s IRS online account. Individual clients will access their online account and digitally sign the authorization, sending it to be recorded on the CAF.

IRS expects this new method will speed processing and allow for almost immediate authorization.

More information about the Tax Pro Account and the extent of its initial functionality will be announced in the future.

To continue your research on Form 2848, see FTC2d/FIN ¶T-1149. For Form 8821, see FTC2d/FIN ¶S-6311.

 

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