Tax Professionals Can Now Submit Form 2848/8821’s to IRS Online
Dustin Wells EA, Tax Specialist
Per IRS Issue IR-2021-20 dated January 25th, 2021, accounting and tax professionals can now submit Power of Attorney forms online! The new IRS “Submit Forms 2848 and 8821 Online” offers contact-free signature options for tax pros and clients sending authorization forms.
The Internal Revenue Service 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. Tax professionals can find the new “Submit Forms 2848 and 8821 Online” option on the www.IRS.gov/taxpro website. of note, 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 or power-of-attorney form(s).
Per IRS Commissioner, Chuck Rettig, “This online tool will allow tax professionals to safely obtain signatures from individual and business clients and upload authorization forms.” Moreover, “This is a first step in our ongoing efforts to expand digital options for tax professionals using electronic signatures and online uploads.” The project is a result of the Taxpayer First Act that requires the IRS to expand the use of the taxpayers’ electronic signatures on authorization forms. This online option also will help protect each taxpayer(s) identity and tax professionals by more easily allowing remote transactions.
Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization, are two forms that allow taxpayers to authorize the IRS to disclose their personal and or business tax information to third parties, such as, tax professionals – CPA’s, Enrolled Agent’s, etc. Form 2848 is a taxpayer’s written authorization appointing an eligible individual to represent the taxpayer before the 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 the IRS. Form 8821 is a taxpayer’s written and signed authorization designating a third party to receive and view the taxpayer’s information.
The taxpayer and tax professionals 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 individual taxpayer’s signature. If using the new online option, the taxpayer’s signature can be handwritten or now 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 the “Authentication” section in the online option’s Frequently Asked Questions.
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 current or outstanding issues with the IRS. The process to mail or fax an authorization form(s) to the IRS is still available to all taxpayers and tax professionals. Signatures on the mailed or faxed forms must be handwritten – electronic signatures are not allowed via mailing or faxing.
Most Forms 2848 and 8821 are recorded on the 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 authorization forms executed with the IRS. The new online option negates the need for specific use equipment (e.g., fax machines, scanners), saves tax professionals’ time in obtaining client, taxpayer signatures, reduces person-to-person contact (Covid concerns), and finally allows the complete flexibility in completing the form anywhere, anytime, for both the tax professional and the tax professionals’ client.
The “Submit Forms 2848 and 8821 Online” option is a step towards the broader IRS effort to expand options for electronic signatures on authorization forms as required by TFA. This summer, the 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 the client’s IRS online account. Individual clients can then access their online account and digitally sign the authorization form and send it to be recorded by the CAF unit.
The IRS expects this new method to dramatically speed up processing and also allow for almost near, immediate authorization submission and uploading to the individual client’s online IRS account.
More information about Tax Pro Account and the expected extent of its initial functionality will be announced in the future by the IRS.