The IRS launches new Tax Pro Account
TAX ALERT |
Authored by RSM US LLP
This week, the IRS launched a new online feature called Tax Pro Account. This feature is currently available for individual taxpayers only. It allows individual taxpayers to digitally authorize their tax practitioner to represent them before the IRS with a Power of Attorney (POA), and to view their tax accounts with a Tax Information Authorization (TIA). The IRS states that "[t]his is the first, basic step toward a more fully integrated digital tax system that will benefit taxpayers, tax professionals and the IRS." This process will significantly shorten the time it takes for tax practitioners to be authorized and on file with the IRS, because the POAs and TIAs submitted through Tax Pro Account will not go through manual review and approval by Centralized Authorization File (CAF) employees. In the future, the IRS hopes to add more functions to Tax Pro Account that will increase electronic interactions between taxpayers and their representatives and the IRS.
Before utilizing Tax Pro Account, however, taxpayers and tax professionals need to take several steps. First, the taxpayer must create their own IRS Online Account. Please note individuals who create an Online Account will not only be able to authorize a representative through Tax Pro Account, but also taxpayer can access some of their own tax information including tax transcripts, information on payment history, digital copies of select notices, balances due and payment plan information. Taxpayers can additionally make payments to the IRS through their Online Account. For more information on how to create an Online Account visit irs.gov. Tax professionals will need a Secure Access Account. Tax professionals must have a CAF number to create a Secure Access Account.
After all parties have (their applicable) accounts, the basic steps for using Tax Pro Account to obtain authorizations to represent taxpayers are as follows: first, the tax practitioner will initiate the POA or TIA. These authorizations are not Forms 2848 or Forms 8821, but, rather, simplified versions of the forms. The eligibility rules for tax professional’s authorization with Form 2848 or 8821 still apply. The IRS estimates that it will take an average of 15 minutes to complete the online authorizations. Authorization requests cannot be saved to continue later. Once completed and submitted by the tax professional, the authorization requests will appear in the taxpayers’ Online Account for their review, approval or rejection, and electronic signature. Because the taxpayers’ identities will already be verified at the time of login, due to the Online Account creation process, the taxpayer will only have to check a box as their signature, and submit the authorization request to the IRS.
The completed digital authorization, if accurate, will go directly to the CAF database and will not require manual processing as would Forms 2848 and Forms 8821. The greatest benefit of this feature is that requests will be recorded in CAF and appear on the list of approved authorizations in the taxpayer's Online Account within 48 hours. This is in contrast to the lengthy CAF manual processing time of Forms 2848 and 8821. After the authorization is recorded, tax professionals may then log in to e-Services Transcript Delivery Service to see the taxpayer's records. However, the IRS won’t notify the tax practitioner if the taxpayer rejects the request or if the request failed to process.
Please note that although multiple representatives can be authorized through this process, each representative must log in with their account to submit their own request. All authorization requests (for the same time periods) must be submitted to the taxpayer by the tax practitioner and approved (signed) by the taxpayer on the same day for multiple representatives to be authorized. Submission of authorizations through Tax Pro Account will revoke authorizations on file with the IRS for the same years and tax matters. Additionally, the two representative limit to receive copies of a taxpayer’s notices and communications remains in effect with this feature.
Again, Tax Pro Account is only available for individual taxpayers, and only to individuals with an address in the United States. Tax Pro Account cannot be used by business taxpayers or other entities. Additionally, tax professional and taxpayer names and addresses must match IRS records exactly for authorizations to be approved. The tax matters that can be authorized are limited to:
- Form 1040 Income Tax
- Split Spousal Assessment or Form 8857 Innocent Spouse Relief
- Shared Responsibility Payment
- Shared Responsibility Payment - Split Spousal Assessment
- Civil Penalty (limited to periods of March, June, September and December)
The available years for authorization are limited to tax year 2000 and forward, plus three future years (calendar year only, not fiscal year).
Tax Pro Account does not replace other options for obtaining third-party authorizations. Forms 2848 and 8821 with handwritten signatures can still be faxed or mailed to CAF for manual processing, and Forms 2848 and 8821 with handwritten or digital signatures can be submitted online through the other digital platform Submit Forms 2848 and 8821 Online, also for manual processing by CAF. The Submit Forms 2848 and 8821 Online platform was previously released in January 2021, and besides Tax Pro Account is the only other option for submitting authorizations with any type of digital signature. Submit Forms 2848 and 8821 Online also has many requirements for utilization. For more information on this platform, please see the irs.gov information page for Submit Forms 2848 and 8821 Online.
If you have additional questions regarding eligibility to use Tax Pro Account or an alternate method to obtain/submit authorization with a Form 2848 or 8821, please contact RSM Tax Controversy Services team.
Call us at (509) 663-1131 or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Alina Solodchikova, Whitney Brady and originally appeared on 2021-07-23.
2021 RSM US LLP. All rights reserved.
The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Homchick Smith & Associates, PLLC is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Homchick Smith & Associates can assist you, please call (509) 663-1131.